BRICS PCG: 'Buy' GE Shipping

BRICS PCG has given a 'Buy' recommendation for Great Eastern Shipping (GE Shipping) with a target price of Rs 306.

The company has, through one of its wholly-owned subsidiaries, placed a new building order for a 350-foot jack up rig with Keppel FELS, Singapore. The rig is scheduled for delivery during Q4CY09.

The decision to place this order forms an integral part of the company's strategy to participate in the growing offshore exploration and production (E&P) arena.

The company already owns and operates two rigs which are under contract with ONGC.

At the current market price of Rs 212, GE Shipping is trading at 11x on FY07 and 8.3x on FY08.