CD Equisearch is bullish on Indian Hume Pipe Company has recommended buy rating on the stock with a target price of Rs 478 in its research report dated April 27, 2018.
CD Equisearch's research report on Indian Hume Pipe Company
The Asian Development Bank forecasts that by 2030, India will encounter a water deficit of 50%. UN projects 840 mn people to live in the most water starved parts of the country by 2050, as compared to about 320 mn people in 2017. India’s Union Ministry of Water Resources has reckoned the country’s current water requirement to be around 1100 billion cubic metres per year, which is estimated to rise to around 1200 billion cubic metres for the year 2025 and further to 1447 billion cubic metres by 2050. With a projected population growth of 1.4 billion people by 2050, the country will scarcely be able to cater to its total water demand.
Outlook
Earnings for FY18 and FY19 have been slashed by 32% and 19.6% respectively. Yet, in view of robust pick up in order in current fiscal, we our ‘buy’ rating on the stock with a revised target price of Rs 478 (previous target: 693) based on 18x FY19e EPS (peg ratio: 1.3) over a period of 9-12 months.
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