Khambatta Securities is bullish on Rajoo Engineers has recommended buy rating on the stock with a target price of Rs 48 in its research report dated November 14, 2017.
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Khambatta Securities's research report on Rajoo Engineers
Rajoo Engineers Ltd (Rajoo or the Company) reported tepid financial result for 2Q FY18. The total revenue of the Company was flat at Rs 274 mn Y-o-Y (Rs 272 mn), whereas Q-o-Q the revenue increased more than 2 fold (Rs 126 mn). The revenue was low for 1Q FY18 due to GST impact. The sales have picked up since then and the management foresee substantial potential. The Company has robust order book, executable in next 9 to 12 months.
OutlookAs per our discussion with the management, the Company can achieve total revenue of over Rs. 1,250 mn with improving margins for FY18 and 30% growth for FY19. At the CMP, the stock is available at an attractive forward P/E of just 13.4x (FY19E EPS) thus providing an investment opportunity for long-term gains. We believe the share price can go up to Rs. 48 (PE - 20x on FY19E EPS) giving an upside of nearly 50%.
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