Stock Review: ABG Shipyard

 

ABG Shipyard has a strong order book, good enough to sustain healthy growth for the next three years. The company has ramped up its capacities at Dahej and Surat, which will further help in the faster execution of its existing order book. In terms of new orders also, the company has seen some traction. "Over the last six-eight months, we have been awarded orders worth 800 crore and we are further getting a lot of enquiries, but we are selective about new orders," says Dhananjay Datar, CFO, ABG Shipyard. Analysts expect the company's revenue and earnings to grow about 20 per cent over the next two years. While the business fundamentals are improving, ABG's stock has surged to `401 (from `240 on September 30), translating into a relatively higher PE of nine times its 2010-11 estimated earnings.