Goldman Sachs reiterates ‘buy’ rating on Everest Kanto Cylinders

Everest Kanto
cmp: Rs 151.70
target price: 286

Goldman Sachs has reiterated a ���buy��� rating on Everest Kanto Cylinders as it believes that growth in CNG cylinders usage will continue to be robust for the next few years despite the recent fall in crude oil prices. The foreign broking company is bullish on the company also due to the fact that Everest Kanto commands a huge share of the CNG cylinder market. ���Everest Kanto continues to hold more than 75% market share in the Indian CNG cylinder market and around 10% globally.

Further, expansion in China and India is on track and the order flow for the next 12-18 months remains intact,��� says the report. The growth in the demand for CNG cylinders, according to Goldman Sachs, would be driven by developing economies, which account for the bulk of the demand, and who rely heavily on imported sources of energy. According to Goldman Sachs, the stock would accelerate over the next few quarters based on strong execution and profitability.