PINC Research has initiated a buy rating on C and C Constructions with an 18-month target price of Rs 272 in its August 13, 2008 research report. "C&C has depicted a continuous growth in its business volumes over the years. Its contract revenues have grown at a CAGR of 40% from FY02-07. Having successfully demonstrated its execution skills & resource mobilizing abilities, we strongly believe that the company's valuations should align with its peers. Hence, we are of the opinion that C&C should command a P/E of 6x (32-35% discount to peer group) its FY10E earnings."
"At the CMP of Rs 146, C&C trades at a P/E of 3.8x & EV/EBIDT of 3.9x its FY10 earnings estimates. We value C&C's core business operations at Rs 232 (6xFY10E EPS of Rs 38.6) and its 49% stake in Kurali Kiratpur BOT at Rs 40 per share. Thus, on a SOTP basis we arrive at Rs 272 per share as the fair value of the stock. Hence, we initiate coverage with a 'BUY' recommendation & an 18-month price target of Rs 272," says PINC's research report. |
