Godawari Power and Ispat Ltd: BUY

From www.indiainfoline.com

Godawari Power and Ispat Ltd (GPIL)

CMP Rs310, BUY

Target price Rs420, Upside 35%

ä Capacity additions to lead to robust volume growth

ä Shift towards sponge iron; accretive to profitability

ä Securing captive resources; beneficial in the long term

Bottom-line to witness a CAGR of 65.3% over FY07-09E; recommend BUY

Led by robust volume growth and improved operating margins, we expect GPIL’s profit to witness a CAGR of 65.3% over FY07-09. At CMP of Rs312, the stock trades at P/E of 8.1x and 6.1x on consolidated EPS of Rs38.9 in FY08E and Rs52.4 in FY09E respectively. We recommend a BUY with a target price Rs420, which implies a P/E multiple of 8x on FY09E consolidated EPS.

Click below for the detailed report on Godawari Power and Ispat Ltd.


Warm Regards,

India Infoline Research Team


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