Buy Dhampur Sugar with target Rs 178: FinQuest Securities
Published on Friday, November 13th, 2009 at 11:21 PMAuthor: stockalert (2027 Articles)
FinQuest Securities has maintained buy rating on Dhampur Sugar Mills with a price target of Rs 178 in its report dated November 12, 2009.
“Dhampur Sugar Mills (DSML) reported excellent set of numbers for 4QFY09 and FY09, beating our estimates. In 4QFY09, Net sales increased by 23.6% YoY to INR 2869.7 million, EBITDA increased by healthy 32.3% YoY to INR 377.5 million and Adjusted PAT posted handsome gain of 82.4% YoY to INR 138.5 million. In view of details furnished by the company as well as changes in global and domestic scenario in sugar industry, we have revised our FY10E estimates and incorporated FY11 estimates. At CMP, DSML is trading at 4.4x FY11E earnings and 2.9x FY11E EV/EBITDA. We believe such a low valuations as compared to its peer (6.0x-7.0x 1-yr forward EV/EBITDA) is unjustified and maintain buy recommendation with target FY11E EV/EBITDA of 4.0x and revised price target of INR 178, “says FinQuest Securities report.
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