Citigroup maintains ‘buy’ rating on Jubilant

CMP: Rs 165

Target price: Rs 245

Citigroup has maintained its ���buy��� rating on Jubilant with a price target of Rs 245, after interacting with the management in a recent analyst meet. ���Jubilant reiterated its FY10 guidance & outlined its strategy to achieve sales & PAT growth of 15% & 26% CAGRs (compounded annual growth rate) over the next three years,��� the bank said in a report.

���It is also considering a sale of its performance polymers, as it looks to reduce debt, improve capital structure & increase focus on the higher margin pharma business. With early signs of recovery in the IPP biz, strong traction in pharma & greater financial discipline, we remain positive,��� it said. Citi added near-term concerns such as volatility in earnings & high leverage appear priced in at seven times estimates earnings per share (EPS) of 2009-10.