Buy Sunil Hitech Ltd

Result Analysis

Sunil Hitech came out with September 09 quarterly results. The result was in line with our expecations. More encouraging was the new order intake which was ahead of our expecation at Rs. 476 Cr. The order book as of Oct-09 stands at Rs. 1420 Cr. as against Rs. 1145 Cr at the end of Jun 09 quarter.

Revenue increased by 3.3% QoQ & 53.2% YoY to Rs. 200.94 Cr.

The operating margin was down QoQ by 100 basis points and YoY by 400 basis points on account of orders of lower margin executed in this quarter.

Company had an exceptional gain of Rs 5. 6 Crs on sale of MF Investment. Company books had mark to market loss of Rs. 13.84 Cr. on these investments in Dec - 08.

Sunil Hitech reported a PAT of Rs 7.0 Crs adjusted to extraordinary gain of Rs. 5.6 Cr. as against Rs 8.47 Crs in Q1 FY 10 & Rs. 6.92 Cr. in Q2 FY 09.

The Adj. EPS for Q2 FY 10 was Rs. 5.70.

Valuation & Outlook

Order pineline for Sunil Hitech looks healthy. The company has an order
book of Rs. 1420 Cr. as on October 09. We expect Sunil Hitech’s revenue and PAT to grow at 33% & 35% CAGR respectively between FY09-FY11.

The stock discounts FY09, FY10E and FY11E adjusted earnings of Rs.19.7, Rs.26.0 & Rs.35.3 at 8.0x, 6.1x and 4.5 respectively. The stock trades at 1.1x for FY09 and 1.0x FY10E to book value. The ROE and ROCE for FY11E is 19.3% & 13.6% respectively.

We are positive on the growth prospects of the company and recommend BUY on the stock with a price target of Rs.283 over a 12-15 month horizon implying upside potential of 79%.We have derived our target price based on FY11E earning and Price earning multiple of 8.

Other Reports

Underperform - Fulford India Ltd

Buy Pantaloon Retail (I) Ltd

Buy Sunil Hitech

Reduce - Colgate Palmolive (India) Ltd

Buy HDFC Bank

Investmentguruindia.com provides expert advice, recommendations, broking firm tips, reports, technical analysis, news and many more things for stock market, mutual fund, commodities, IPO, currency derivatives, F&O, world market.

Countery: NirmalBang

Imp Link: BSE, NSE, Sensex, Nifty, MCX, NCDEX

Keyword: Free Tips, Recommendation, News, Stock Market, Mutual Fund, Commodities, Currency Derivatives, World Market, IPO, Investment In India, Investment Guru India, Technical Analysis, NSE, BSE, MCX, NCDEX, Expert Advice, F&O, Nifty, Sensex, Indian Equity Market, Indian Mutual Fund, Indian Commodities , Indian Currency Derivatives, Indian  IPO, Updates, stock market today, stock trading, online stock trading, money market, buy, sell, currency market, market forecast, share trading, online trading, options trading investment funds, stocks shares, stocks and shares, share price, insurance, financial services, morning star, day trade, currency options, futures brokers

Disclaimer: While we have made efforts to ensure the accuracy of our content (consisting of articles, views, advice and information), neither this website nor the author shall be held responsible for any losses/ incidents suffered by people accessing, using or is supplied with the content. The views and investment tips expressed by investment experts and authors on investmentguruindia.com are their own, and not that of the website or its management. Investmentguruindia.com advises users to check with certified experts before taking any investment decisions. Investment in mutual funds is subject to market risk so please read offer document before you invest. The Calls, views, advice made herein are for informational purpose and are not recommendations to any person to buy or sell any securities. The author does not accept any liability for the use of this column. Readers of this column those who buy or sell securities based on the information in this column are solely responsible for their actions. The author may have positions in any of the stocks mentioned in this column. The Recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. Readers using the information contained herein are solely responsible for their actions. The information and views contained herein are believed to be reliable but no responsibility or liability is accepted for errors of fact or opinion. Editors may or may not have trading or investment positions in the securities mentioned herein.  Also Read Disclaimer