Action Construction Equipment, Outperformer
Results in line
Price Rs462 Target Price Rs642
Implied Upside 38.9%
Valuation: At the ruling market price of Rs462, the stock trades at 16.3x
FY09E and 11.5x FY10E earnings of Rs28.4 and Rs40.1 respectively. With demand for construction equipment growing at a fast pace and with new high margin products to be launched soon, we expect ACE to report revenue CAGR of 39.7% and earnings CAGR of 53.5% during FY07-10E. We maintain Outperformer rating on the stock with a target price of Rs642, implying an upside of 38.9%.
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