Prabhudas Lilladher retains ‘buy’ Bharati Shipyard
Prabhudas Lilladher has retained a ‘buy’ rating on Bharati Shipyard after the company’s wholly-owned subsidiaries lent Rs 2-2.5 billion to Great Offshore’s promoters against a pledge of 14% equity
CMP: Rs 69.95
Target price: Rs 113
Prabhudas Lilladher has retained a ���buy��� rating on Bharati Shipyard after the company���s wholly-owned subsidiaries lent Rs 2-2.5 billion to Great Offshore���s promoters against a pledge of 14% equity. According to the brokerage, although there would not be any P/L implication on the company, as the interest rate on the loaned amount is at commercial terms, Bharati Shipyard ���would have to leverage further in order to fund its capex���.
After accounting for further leverage, the company���s debt equity ratio would stand at 1.2, says a report. Karvy is of the view that the largest risk lies in the fact that the ���collateral is far lower than the loaned amount���. ���In case, Great Offshore���s promoters are unable to repay the loan or find financial investors to buy their stake, Bharati Shipyard would effectively be acquiring the stake at approximately Rs 360-450 share,��� notes the report.
Target price: Rs 113
Prabhudas Lilladher has retained a ���buy��� rating on Bharati Shipyard after the company���s wholly-owned subsidiaries lent Rs 2-2.5 billion to Great Offshore���s promoters against a pledge of 14% equity. According to the brokerage, although there would not be any P/L implication on the company, as the interest rate on the loaned amount is at commercial terms, Bharati Shipyard ���would have to leverage further in order to fund its capex���.
After accounting for further leverage, the company���s debt equity ratio would stand at 1.2, says a report. Karvy is of the view that the largest risk lies in the fact that the ���collateral is far lower than the loaned amount���. ���In case, Great Offshore���s promoters are unable to repay the loan or find financial investors to buy their stake, Bharati Shipyard would effectively be acquiring the stake at approximately Rs 360-450 share,��� notes the report.
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