LKP puts buy on Aries Agro.

>> Wednesday, November 26, 2008

Target price: Rs 75 

LKP Shares has recommended a ‘buy’ on Aries Agro, with a 12-month price target of Rs 75 on expectations that net profits would grow 65% and revenues would increase 42%, compounded over the next two years. 

The company posted a 23% drop in net profit in the first half of 2008-09, led by a 4% drop in operating profit margins to 20.5%, according to the broking firm. “Aries took a price increase during the end of the first quarter and another one during the second quarter, which we believe should enable the company to arrest the decline in margins during the second half of the current fiscal,” LKP said in a report. 

The outfit estimates Aries’ earnings per share for 2008-09 at Rs 9.24, as against Rs 8.79 in 2007-08. In 2009-10, its EPS is estimated at Rs 16.93.