Kalindee Rail Nirman (Engineers), BUY
On the fast track to success
Price Rs 400 Target Price Rs 592
Kalindee Rail Nirman (Engineers) Ltd (KRNL), whose fortunes are closely linked to the infrastructure spends of the Indian railways, is on the fast track to growth. The ambitious capex plans of the Indian railways have presented KRNL with a huge Rs 300bn opportunity. The upgradation of existing rail network, dedicated freight corridor, plans to set up metro rails and orders from private players to provide linkages are likely to ensure a fat order book for KRNL in the years to come. At present, it has an order book of Rs 5 bn with new orders worth Rs 3 bn to flow in over the next 6 months. We expect KRNL to post a 63% and 88% CAGR in revenues and profits respectively during FY07-10E period. We expect fully diluted EPS of Rs 10.1, Rs 23.6 and Rs 49.3 in FY08-10E. Given the robust growth prospects for KRNL and its strong relationship with the IR, BUY with your own RISK .Expecting (not promising) a price target of Rs 592, an upside of 48%.
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