Kotak recommends ‘Buy’ on Gujarat Apollo

MUMBAI: Kotak Securities has recommended ‘Buy’ on Gujarat Apollo with a downward revised price target of Rs 270. Long monsoon season this year and slowdown in NHAI activity for awarding new projects is likely to impact the company’s sales, the report says.

“Recently, from second half of third quarter, company has been observing pick up in enquiries and orders from its key clients. We believe that the company would maintain its dominant position in the domestic market.

However we tweak our earning estimates downward to account for possible earning slippage and slight margin contraction due to increasing input prices. We remain positive on the road equipment sector as well as on the company and recommend 'BUY' with a one year DCF based price target of Rs.270 (290 earlier),” the report added.