Mercator Lines is another such company expected to report a significantly better performance in the September 2010 quarter on the back of a turnaround in tanker freight rates. The tanker freight market has gained from a pickup in global oil demand and is nearly twice that of the year-ago period.
As a result, we expect the company to report a consolidated net profit of 40 crore in the September 2010 quarter, compared to a net loss of 1.9 crore a year earlier. The scrip is currently trading at a price-to-earnings multiple (P/E) of 18.4. However, post-September quarter results, the P/E would fall to 11.4, giving it reasonable scope to gain.
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