Brics PCG: 'Buy' EMCO

Brics PCG has given a 'Buy' recommendation for EMCO at a price target of Rs 674.

EMCO has kick-started FY07 with an excellent first quarter performance. Revenues have grown by 77.5% while net profit surged 114%.

The company witnessed broadbased growth across all divisions, with a notable improvement in EBITDA margin from 13% to 13.4%.

This was largely due to the volume expansion and the consequent impetus to bottomline growth arising from economies of scale.

In their estimates for FY07 and FY08 they factor in a sales and net profit CAGR of 34.1% and 34.8% respectively. EMCO holds a strong Rs 4,400 crore order book with an average execution period of less than 12 months.

BRICS PCG expects 44.3% sales growth during FY07.