India Infoline: Buy Usha Martin for 30% gain

India Infoline has recommended a buy rating on Usha Martin.

In a report released recently, the brokerage said: "Usha Martin posted strong results for Q2FY07 with performance improving on sequential basis while registering robust growth on yoy basis. The sequential earnings growth was led by margin improvement whereas the yoy earnings growth was driven by flattish interest & depreciation and lower taxes.

"For H2 FY07, company expects further improvement in operational performance with strong volumes and higher benefits from iron ore integration.

"We rate the stock as 'BUY' with EPS estimates of Rs26 for FY07 and Rs32.6 for FY08. Our one-year target price of Rs228 based on 7x FY08 EPS implies 34% appreciation."

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