'Buy' Sintex – TP lowered to Rs.103 - Geojit BNP Paribas Financial Services Limited

The stock price has corrected over 35% in the last three months while the Sensex edged up 2%. The steep correction in the stock price is due to slow execution at the monolithic business, deteriorating fundamentals in the Eurozone and the FCCB concerns.

However, it seems that all these concerns are fully priced in and the long term story remains intact.

Major catalysts to the stock price over the next 12 months would be rupee appreciation (will lower Forex liability for FCCB repayment) and improvement in the execution of monolithic business that contribute 28% of revenue.

Positive IIP and auto growth numbers would boost custom molding business.

At the current price range of Rs.73, the stock is traded at 5 P/E of one- year forward earnings. The target price implies 45% upside from the current price.

Source : Equity Bulls

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