Buy Sunil Hitech Engineers, target 295: Sharekhan

Mumbai: Sharekhan is bullish on Sunil Hitech Engineers and has recommended a buy rating on the stock with a price target of 295. According to the brokerage, Sunil Hitech Engineers has grown at an exponential rate of 103 percent over FY2007-09. In view of its strong order book, the huge opportunity in its chosen niche space and its initiatives to undertake large projects, Sharekhan expects the company to double its net revenues and earnings over FY2009-12.

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Sunil Hitech Engineers is an India-based company, which is engaged in the business of fabrication, erection, testing and commissioning of bunkers, electrostatic precipitators (ESPs) and boilers. It has two segments: project, and operations and management (O&M) supply. Project segment is engaged in the business of fabrication, erection and commissioning of boilers, erection, testing, commissioning of ESP, transmission and distribution and EPC contract. O&M supply segment is engaged in the business of repair and maintenance, overhauling, and renovations of boilers and auxiliaries, ash handling systems, and supply of economizer coils, reheater coils, and raiser tubes and J bends at various thermal power plants. The company's subsidiary is Sunil Hitech Engineers and Manufactures.

According to Sharekhan, the stock trades at a substantial discount to its peers and its current valuation leaves significant scope for re-rating. Moreover, it has not factored in any value from the company's 20 percent stake in the GangaKhed project and 49 percent stake in its joint venture for coalmines. With the recommended target price if the stock is bought at Monday's closing price of 224.50, the percentage of gain would be 31.40 percent.