Garware Offshore Services Ltd
CMP Rs242, BUY
Target price Rs318, Upside 31.5%
Please find attached herewith Company Report on Garware Offshore Services Ltd.
ä Huge spend on offshore E&P activities planned in
ä GOSL, with its expanded fleet base, is well poised for robust growth
ä Higher contribution from PSVs to fuel margin expansion
ä New initiatives to add to revenue growth
Attractive valuations at P/E of 8.4x on CY09 earnings
GOSL is adding four vessels to its fleet in CY08 and one in CY09. The full year benefit of the vessels to be delivered in 2008, would reflect in CY09 financials. We expect GOSL to register a CAGR of 57.6% in revenues and 64% in PAT during CY06-CY09. The stock at CMP of Rs242 is available at 8.4x CY09 earnings. With long term contracts tied up for most of the vessels, we believe there exists high degree of visibility for future revenue growth. At 11x CY09E earnings of Rs28.9, the target price works out to Rs318, an upside of 31.5%. We recommend a BUY.
Warm Regards,
BigGains !!
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