Buy Elgi Equipment - Result Update - Kotak

EEL reported Q2FY13 PAT lower than our estimates due to forex loss and acquisition fees incurred in Rotair S.p.A; company reported moderation in standalone and consolidated operating margins on account of increased personnel cost.

- Our interaction with EEL's management and other industry players highlights that the situation in Europe has been improving at a moderate pace. Demand from SME's has been adequate in 1HFY13 for the industry.

- We remain positive on company's strong brand franchise in domestic markets and increasing geographical diversification. We value the company using DCF valuation methodology and maintain 'BUY' recommendation on company's stock with one year unchanged price target of Rs 98.

Source : Equity Bulls

Keywords