Buy EIL for target of Rs 380: Ashit Suri
EIL is a good play and I see targets of above Rs 380 over a one-year timeframe.
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| In a chat with ET Now, Ashit Suri, Fundamental Research Analyst, JV Capital Services, talks about the outlook of Engineers India Ltd.
You have a buy call on Engineers India Ltd. with a target of Rs 385. That's a zero debt company, is that what's working in the favour?
Yes. That is one of the big positives for Engineers India. Besides, the order book is very healthy, which constitutes around three times revenues for FY10. The model itself is very unique and good with concentration in engineering, consultancy and design in the hydrocarbon space. The valuations are also pretty attractive at 17 times FY12 earnings and the return on equity for this company is also close to around 40, which is way higher than the 28-25 for engineering companies. So, all these factors make EIL a good play and I see targets of above Rs 380 over a one-year timeframe.
You have a buy call on Engineers India Ltd. with a target of Rs 385. That's a zero debt company, is that what's working in the favour?
Yes. That is one of the big positives for Engineers India. Besides, the order book is very healthy, which constitutes around three times revenues for FY10. The model itself is very unique and good with concentration in engineering, consultancy and design in the hydrocarbon space. The valuations are also pretty attractive at 17 times FY12 earnings and the return on equity for this company is also close to around 40, which is way higher than the 28-25 for engineering companies. So, all these factors make EIL a good play and I see targets of above Rs 380 over a one-year timeframe.
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