Merrill Lynch puts 'buy' on Bombay Rayon
Merrill Lynch has initiated coverage on Bombay Rayon Fashion with a 'buy' rating and price target of Rs 450 citing attractive valuations.
By ET Bureau |
Bombay Rayon
CMP: Rs 347.20
Target Price: Rs 450
Merrill Lynch has initiated coverage on Bombay Rayon Fashion with a ���buy��� rating and price target of Rs 450 citing attractive valuations.
���Valuations are inexpensive at 9 times FY10 (estimated) earnings, given strong growth outlook and high RoE at 24%,��� the Merrill Lynch note to clients said.
According to the brokerage, the company is set to become India���s largest textile firm, when its new capacities come onstream.
���Bombay Rayon is integrated from yarn dyeing to garmenting, which helps shorten lead time and improve efficiencies. By out-sourcing its entire spinning and partial weaving process, it garners a higher return on capital than its peers and earnings are somewhat insulated from the fluctuations in fibre prices. Moreover, the focus on designer segment gives pricing power,��� the note added.
CMP: Rs 347.20
Target Price: Rs 450
Merrill Lynch has initiated coverage on Bombay Rayon Fashion with a ���buy��� rating and price target of Rs 450 citing attractive valuations.
���Valuations are inexpensive at 9 times FY10 (estimated) earnings, given strong growth outlook and high RoE at 24%,��� the Merrill Lynch note to clients said.
According to the brokerage, the company is set to become India���s largest textile firm, when its new capacities come onstream.
���Bombay Rayon is integrated from yarn dyeing to garmenting, which helps shorten lead time and improve efficiencies. By out-sourcing its entire spinning and partial weaving process, it garners a higher return on capital than its peers and earnings are somewhat insulated from the fluctuations in fibre prices. Moreover, the focus on designer segment gives pricing power,��� the note added.
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