Citigroup maintains ‘buy’ rating on Jubilant Organosys Ltd.

>> Saturday, June 20, 2009

CMP: Rs 165
Target price: Rs 245
Citigroup has maintained its ‘buy’ rating on Jubilant with a price target of Rs 245, after interacting with the management in a recent analyst meet. “Jubilant reiterated its FY10 guidance & outlined its strategy to achieve sales & PAT growth of 15% & 26% CAGRs (compounded annual growth rate) over the next three years,” the bank said in a report.

“It is also considering a sale of its performance polymers, as it looks to reduce debt, improve capital structure & increase focus on the higher margin pharma business. With early signs of recovery in the IPP biz, strong traction in pharma & greater financial discipline, we remain positive,” it said. Citi added near-term concerns such as volatility in earnings & high leverage appear priced in at seven times estimates earnings per share (EPS) of 2009-10. - Economic Times