KRChoksey has maintained its buy rating on Sanwaria Agro Oils with a target price of Rs 52 in its April 16, 2009 research report.

“We have maintained our growth targets and expect the company to grow by 15% in FY10. We had stated in our earlier report that the company is planning to enter into value added products, but the company has put its plans on hold for the time being We do not expect the company to enter into the same till H2FY10 and so have not considered the revenues from the same. However, with raw material prices cooling off and global economy showing signs of recovery we expect demand to pick up.”

“Also, with consumers shifting from loose oil to branded oil on health concerns, we expect company’s revenues from branded segment to increase. Revenue from power business is doing good and likely to continue the same going ahead. At the CMP of Rs 42.5, SAOL is trading at 13.9x its FY09 EPS of Rs. 3.1 and 11.8x its FY10E EPS of Rs 3.5. We maintain a BUY on the stock with target price of Rs 52, giving an upside potential of 22%,” says KRChoksey’s research report.

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