Isnt EIL which came with a FPO at a rock bottom price of 144 almost at a 4 year low a prime pick for buying at cmp of 152 due to FPO overhang which is finally getting clear.Also
- On an Expected EPS of 16 rs for FY 14 PE of 9 odd becomes very attractive .The main factor that has attracted analyst to this counter is the cheap valuation. The company is now trading at nine times its consensus forward earnings, significantly lower than its 3-year average. With the improvement in growth, a re-rating is expected, which promises handsome returns to the long-term investors. The downsideriskto this counter is limited from current levels because the company has extremely strong fundamentals.
Due to its asset-light business model, low capital requirement, high operating margin and negative working capital,
Engineers India’s return on equity is above 30 per cent. The returns ratios are expected to remain at elevated levels because 54 per cent of its current order book is from the high-margin consultancy segment. It is a debt-free company and also boasts Rs 2,600 crore cash balance, which is about 50 per cent of its current market cap. The management is following a liberal dividend payout policy and this is expected to continue in the future.
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Cash equivalent of almost rs 74 on books.
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Excellent div yield including interim dividend of rs 3 expected to be announced in march 14 like in last year.
4)The company’s effort to increase its international presence is also yielding fruit: 28 per cent of the orders were from international clients as on 31 December, compared with just 7 per cent as on 31 March 2013. While easing tensions in the Middle East area have helped get more orders, the weakening rupee is helping the company with better export realisations.
5)Due to flipping by IPO applicant the price may fall down further making it more attractive?
No wonder different research houses like Ambit,IndiaNivesh,Religare & Quant broking has given a price target ranging from 160- 209.
Views Invited.
Discl- Have been allotted shares in the recent FPO.