Buy Pennar Industries, target of Rs 33: Karvy

Karvy Stock Broking has upgraded its rating on Pennar Industries from market performer to buy with a target of Rs 33 in its January 12, 2009 research report. "For Q3FY09, we expect Pennar Industries Ltd (PIL) to report net sales growth of 11% (YoY) and de growth of 7% (QoQ) to Rs 1598 million. We expect net profit to be around Rs 87.5 million, 13% lower (YoY) and 3% lower (QoQ)."

"We maintain our sales and earning estimates of PIL for FY09 and FY10. Based on earnings, we value PIL at Rs 30 per share (8x of FY10 EPS). To add to that, value from real estate holding, is estimated to be around Rs 3 per share. Hence we retain our target price of PIL at Rs 33 and upgrade our rating from Market performer to BUY due to recent fall in stock price. Currently, PIL is trading at EBITDA multiple of 6xFY09. Our target price also reflects an EBITDA multiple of 6x on FY10," says Karvy Stock Broking's research report.
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