ICICI Securities has maintained its buy rating on Sesa Goa with a price target of Rs 6300 in its April 29, 2008 research report. "Sesa Goa’s Q4FY08 results beat expectations, with stellar 207% YoY net profit growth on the back of record quarterly iron-ore sales of 5mnte. Revenues were up 108% YoY and 140% QoQ to Rs 17.1 billion. EBITDA increased 208% YoY and 61% QoQ to Rs 12.2 billion with EBITDA margin at 71%."
"We are revising our FY08E, FY09E and FY10E earnings estimates upwards 18.7%, 52.5% and 62.8% respectively, given high earnings trajectory on the back of: i) positive volume surprise in the quarter as well as FY08 (12.44mnte) combined with volume guidance of 25-30% increase per annum, ii) robust pricing scenario via increased spot sales mix and 65% price increase in contract sales. Post achieving our earlier price target of Rs 3,989 per share, we are upgrading our price target to Rs 6300 per share based on FY10E P/E and EV/EBITDA of 8x and 3.9x respectively. Maintain BUY," says I-Sec's research report.
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