ULJK Securities puts ‘buy’ on Bombay Rayon Fashion

Bombay Rayon 
CMP: Rs 154.65 

TARGET PRICE: Rs 263

ULJK Securities has a ‘buy’ rating on Bombay Rayon Fashion as, according to the broking outfit, the company is increasing its production capacity and also has a diversified market presence. “The company has taken steps for expansion in Maharashtra, which include setting up of the garments manufacturing capacity of 100,000 pieces per day and of fabrics capacity of 180 mn mtr/annum,” says the report. 

The company also has a good presence in the US as well as in Europe, it adds. The report also highlights the point that while the company’s garments are sold in the offshore market, its fabrics are sold in the domestic arena. According to the broking firm, at a CMP of Rs 156, the stock discounts at an FY09E EPS of Rs 26.80 by 5.8 times and an FY10E EPS of Rs 43.80 by 3.5 times.