Angel Broking has recommended a reduce rating on Grasim Industries, with a price target of Rs 1900, in its report dated May 20, 2009.
“At the CMP of Rs 2,254, Grasim is trading at an EV/EBIDTA of 6.5x and 6.4x FY2009E and FY2010E EBIDTA and EV/tonne of US $ 118/tonne and $ 110/tonne on FY2009E and FY2010E capacities, respectively. With the imminent downturn in the cement cycle owing to the bunching of huge capacity and concerns of falling prices, and the recent run up in the stock price, we believe that the stock is expensive. Hence, we recommend a Reduce on the stock, with a target price of Rs 1,900,” says Angel Broking’s report.
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