Buy Jindal Saw, target of Rs 1045: Emkay

Emkay Research has maintained its buy rating on Jindal Saw with a revised target price of Rs 1045 in its May 8, 2008 research report. "Jindal Saw (JSL) has declared its Q1CY08 results which are inline with our expectations. In Q1CY08, JSL reported 37.8% growth in the net sales from Indian operations. In Q1CY08, it reported the net turnover of Rs 9.521 billion as against Rs 1.123 billion (which includes Rs 6.911 billion from Indian operation and Rs 5.78 billion from USA operations which has been sold off last year) in the corresponding quarter of last year. Jindal SAW has a strong order book of USD 1.09 billion which includes 65% of exports orders."

"On the basis of CY08E and CY09E revised EPS of Rs 52.3 and Rs 81, the scrip is trading at an attractive PE multiple of 11.8x and 7.6x respectively. We have downgraded our target price from Rs 1280 to Rs 1045 based on SOTP valuation method. The target price includes Rs 226 per share of the value of quoted investment and Rs 819 as one year forward DCF value of the pipe business. At our target price the scrip discounts CY09E EPS of Rs 81 by 12.7x. We maintain our BUY recommendation on the scrip," says Emkay's research report.

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