Karvy Stock Broking has changed its recommendation on Nitin Fire Protection Industries from buy to outperformer with a price target of Rs 160 in its March 18, 2009 research report.
“In the fire protection and security business, the demand has been negatively impacted due to slowdown in construction activity – both commercial and residential. Of the various contracts awarded to the company, Nitin Fire has not been able to execute few of them because of the client’s decision to slowdown or hold that particular project. Accordingly that would lead to difficult 4QFY09 for the company.”
“We expect the company’s earnings to grow by 32% during FY10E primarily on back of better capacity utilization of the company’s Vizag plant. However due to slowdown in the construction activity and corporate capex plans; we expect the company’s fire protection and industrial cylinder segment would be hampered in FY10E. On back of lowering of our EPS estimates and lowering of PE multiple to reflect the current market valuation, we are reducing our price target by 33% to Rs 160 and change our recommendation from BUY to Outperformer,” says Karvy Stock Broking’s research report.
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