SMC analyst Sumit Kukreja has the following View,
The expected downturn in the US economy and the increasingly protectionist environment leading up to the elections in 2012 are the main
concerns for the company. Also the operating margins of the company are very weak compared to similar sized players. On a post-issue P/E multiple of 11.96x, the issue seems to be fairly priced and captures the growth potential of the company in the immediate future.
HSBC has the following Views,
The company has high level of debtors, which has led to negative cash flows from operations in the past. Considering the P/E valuation on the upper end of the price band of Rs 150, the stock is priced at pre issue P/E of 9.1x on its FY11 EPS of Rs 16.5 and post issue P/E stands at 12x; and on the lower end of the price band of Rs 130, the stock is priced at pre issue P/E of 7.9x and post issue P/E stands at 10.4x. On comon with the other key industry players, the stock valuation looks expensive. We recommend our investors to Avoid the issue.
