Brokerage views on Sintex Industries

Emkay Global - Target Rs 418

Emkay Global Financial Services has recommended a buy rating on Sintex Industries, with price target of Rs 418, in its report dated October 13, 2008.

"During Q2FY09, Sintex reported revenue growth of 114% YoY to Rs 7.3 billion (below expectation) and Net Profit of Rs 838 million up 86% YoY (above our expectation). We maintain our earnings estimates of Rs 21.8, Rs 31.7 and Rs 41.1 for FY09E, FY10E and FY11E respectively. At CMP of Rs 196, Sintex is trading at 9x FY09E earnings and EV/EBITDA of 3.5x FY09E. We maintain our BUY rating," says Emkay Global Financial Services' research report.

Reliance Money - Target of Rs 364

Reliance Money has maintained its buy rating on Sintex Industries with a target of Rs 364 in its October 14, 2008 research report. "Sintex Industries Ltd (SINTEX) reported a revenue growth of 84.9% y-o-y to Rs 7198.4 million. The net profits also improved by 86% to Rs 838 million as against Rs 450 million in Q2FY08. Along with its presence in the potential markets and diversified growth opportunities available, we believe Sintex would maintain its impressive performance going ahead. We maintain our BUY rating with the target price of Rs 364. At the target price, the stock would discount FY10E EPS and EV/EBITDA by 11x and 7.7x respectively," says Reliance Money's research report.

HDFC Securities - Target of Rs 792

HDFC Securities has maintained its buy rating on Sintex Industries (SIL) with an 18-month target of Rs 792 in its October 14, 2008 research report. "Revenues and profits of SIL are expected to grow at a CAGR of 56% and 68% between FY08-10E. We expect it to re-rate positively and when coupled with the underlying earnings growth, should deliver significant out performance to investors in the long term."

"We believe that the overall business momentum of the company remains robust. However, the stock has significantly corrected owing to bad equity market conditions and to that extent valuations have taken a hit. We maintain our BUY rating on the stock with a target price to Rs 792 over an 18-month period, based on the steep discount to its NAV and expected upside potential based on valuation re-rating," says HDFC Securities' research report.