Edelweiss - Sanghvi Motors

Edelweiss on Sanghvi Motors say,

To manage higher growth with the ongoing investment in infrastructure sector, the
company incurred a total capex of INR 1.9 bn in FY07 and ended the year with a gross
block of INR 5.6 bn. Going forward, it plans to add cranes worth INR 1.5-1.6 bn. Based
on the continuous capacity expansion, we expect the company’s revenues to register a
CAGR of 26% (to reach INR 3.0 bn) and EPS CAGR of 37.2% (to reach INR 797 mn)
during FY06-09. On our EPS of INR 78 and INR 101.7, the stock trades at a PE of 10.5x
and 8.1x our estimates for FY08E and FY09E, respectively. We maintain our ‘BUY’
recommendation on the stock.