Sunday, September 26, 2010
Investors may avoid subscribing to the initial public offer of retailer Cantabil Retail. The offer values the company at 15 times the per-share earnings of FY10 at the higher end of its price band of Rs 127-135, and 13 times estimated FY11 earnings.
Investors may subscribe to the initial public offer of infrastructure player Ashoka Buildcon. At the upper end of its price band of Rs 297-324, the offer discounts FY-10 consolidated earnings by 22 times and estimated FY-11 earnings by 14 times. Larger players in this space such as Jaypee Infratech and IRB Infrastructure trade at valuations of 21-22 times the trailing earnings. However, Ashoka may have scope for higher growth.
An established track record of project execution, quality order book and technical collaboration with international players, besides high trajectory of earnings growth strengthen the prospects of material-handling player Tecpro Systems. Investors with a two-year perspective can consider investing in the initial public offer of Tecpro. The offer price of Rs 340-355 discounts the company's consolidated per share earnings estimated for FY-11 by 12-13 times. The valuation is at a good discount to peers such as McNally Bharat Engineering and TRF.
Investors with a long-term perspective can consider subscribing to the initial public offer of VA Tech Wabag (VA Tech), an Indian water solutions provider with a multinational presence. Well-entrenched in the high-potential water-treatment business, strong foothold in developing nations, sound financials and debt-free status buttress our recommendation.