Hold CCCL, tgt Rs 820: PINC

PINC research has recommended hold rating to Consolidated Construction Consortium Ltd (CCCL) with target price of Rs 820, in its March 14, 2008 research report. According to PINC Research "The Indian construction sector is on a high growth trajectory backed by increased government thrust & funding from multilateral agencies.The sector is expected to maintain its momentum and continue to grow at a 12-15% CAGR over FY07-12. Strong project management capabilities, a robust business model and an experienced management team will enable CCCL to capitalise on the high growth opportunities available in the real estate and industrial sector".

" At the CMP of Rs 715, CCCL trades at a P/E of 12.6x & EV/EBIDTA of 8.2x its FY10 estimates. Its beta of 0.68 gives us an estimated WACC of 12%. Assuming a 3.5% terminal growth, we arrive at a DCF value of Rs 820/share. The current valuations appear to be fairly rich as compared to its peers, which are trading at an average P/E multiple of approx 12.7x FY09 estimates. However, there could be a re-rating in valuations following clarity on its 330 acre food processing SEZ and commercial BOT projects. Hence we initiate coverage on the stock with a 'HOLD’ recommendation" says PINC research report.

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Source : MoneyControl