Monday, February 18, 2008

Garware Offshore Services Ltd. Buy

Garware Offshore Services Ltd. Buy

CMP : Rs 205 Price Target : Rs 368

Garware offshore services ltd (GOSL) is in the offing to become a key player in the support services of oil exploration and drilling activities in India. We believe the company would be a major beneficiary of the increasing demand for offshore vessels services on account of its timely fleet expansion plans.

The company’s top line is expected to grow at a CAGR of 32%* during FY08-FY10 on the back of fleet expansion and healthy improvement in day rates and a net margin of 40%+ despite higher interest charges. We recommend a “Buy” on the stock with a price target of Rs 368 over the next 12 months, a potential 80% upside over the CMP.

Networth, February 18, 2008

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