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Tuesday, April 20, 2010

Noida Toll Bridge Company Stock Analysis

Stock investment research team of Firstcall has recommended to buy stocks of Noida Toll Bridge Company with a price target of Rs 45 as against the stock price (CMP) of Rs 34.05 in its latest report.

Stock analysis and Investment Rationale from stock broking house:
``The Noida Toll Bridge Company (NTBCL) has been promoted by Infrastructure Leasing and Financial Services Ltd. (IL&FS) as a special purpose vehicle (SPV) to develop construct, operate and maintain the DND Flyway on a Build Own Operate Transfer (BOOT) basis.

At the current market price of Rs.34.05, the stock is trading at 21.27 x FY10E and 16.04 x FY11E respectively. Price to Book Value of the stock is expected to be at 1.51 x and 1.38 x respectively for FY10E and FY11E. Earning per share (EPS) of the company for the earnings for FY10E and FY11E is seen at Rs.1.60 and Rs.2.12 respectively.Net Sales of the company is expected to grow at a CAGR of 13% over 2008 to 2011E respectively.

The company has set up a 100% subsidiary, DND Flyway, for the implementation of development rights. Part of the surplus land on the Noida side has been transferred to the subsidiary. The contribution of the construction sector to India`s GDP is likely to increase in the coming years in light of the Government`s highway projects. These projects have thrown up fresh opportunities for NTBCL. On the basis of EV/EBITDA, the stock trades at 10.01 x for FY10E and 8.98 x for FY11E.

Firstcall, the stock trading broker expects that the company will keep its growth story in the coming quarters also. Hence recommendation to buy stocks of this particular scrip with a target price of Rs.45.00 in Medium to Long term investment portfolio.

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