Buy Great Offshore at target price of Rs 500
Great Offshore CMP: Rs 400 Target Price: 500 Domestic broking house Asit C Mehta has recommended a buy on the offshore service provider – Great Offshore citing opportunities in the offshore services sector and company’s expansion plans as the main reasons. “We expect the company’s sales to grow at a CAGR of 14.7% and PAT (profit after tax) to grow at a CAGR of 12.4% from FY08 to FY10E. However, we estimate a decline in earnings in FY09E (FY09E EPS of Rs.48.2 compared with FY08 EPS of Rs.52.9),” it said in its note to clients. The brokerage says that the company’s costs are expected to rise at a faster pace than the revenues. “Due to expected dip in earnings in FY09E, we recommend investors with exposure to this stock to stay invested, while recommend buy at declines for fresh investors,” it added.
