AnandRathi assigns 'buy' to Ador Fontech; target Rs 210
AnandRathi Financial Services has recommended ‘buy’ on Ador Fontech for a target price of Rs 210.
By ET Online |
MUMBAI: AnandRathi Financial Services has recommended ���buy��� on Ador Fontech for a target price of Rs 210. The company has reached a milestone in 2007-08, as its revenue crossed Rs 100 crore mark for the first time in the company���s history. The company���s top line and bottom line has reported a significant growth during 2007-08, as the revenue surged by nearly 26 per cent year on year to reach Rs 100.2 crore and net profit witnessed 72 per cent year on year growth to report at Rs 8.8 crore.
It���s a zero debt company and being in services, no major capital expenditure is needed, so there is no need to raise fresh debt. Further, the higher growth in bottom line in comparison to top line has reflected the improvement in operational efficiency of the company. The brokerage expects the company to further enhance its reach in coming years as the industry itself is on a growth trajectory.
The company serves capital goods /machinery segment as ��� ���Life Enhancement / reclamation for Vital Machinery Components���. The domain expertise in this sector calls for application of high level of skills covering metallurgy, chemical and repair welding processes. There are quite a few players in this market giving it more like an oligopolistic structure.
The company has a number of key technological collaborations with global players to offer such services across wide range of equipments or machineries.
Ador Fontech is providing interesting investment opportunities for value investors, as the stock is quoting at a 4X & 3X of ���09 & ���10 earnings respectively. Further, the company is showing very healthy ROE and ROCE on sustained basis. Similarly dividend yield at current price is 4 per cent. All this is making the stock a good fundamental story for long term investors, says AnandRathi.
It���s a zero debt company and being in services, no major capital expenditure is needed, so there is no need to raise fresh debt. Further, the higher growth in bottom line in comparison to top line has reflected the improvement in operational efficiency of the company. The brokerage expects the company to further enhance its reach in coming years as the industry itself is on a growth trajectory.
The company serves capital goods /machinery segment as ��� ���Life Enhancement / reclamation for Vital Machinery Components���. The domain expertise in this sector calls for application of high level of skills covering metallurgy, chemical and repair welding processes. There are quite a few players in this market giving it more like an oligopolistic structure.
The company has a number of key technological collaborations with global players to offer such services across wide range of equipments or machineries.
Ador Fontech is providing interesting investment opportunities for value investors, as the stock is quoting at a 4X & 3X of ���09 & ���10 earnings respectively. Further, the company is showing very healthy ROE and ROCE on sustained basis. Similarly dividend yield at current price is 4 per cent. All this is making the stock a good fundamental story for long term investors, says AnandRathi.
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