MIC Electronics - Buy Stocks For Mid-Long Term Investment

Equity investment research team of Firstcall has recommended to buy stocks of MIC Electronics for medium to long term investment.

Firstcall has recommended a `Buy stocks` rating on MIC Electronics with a price target of Rs 53 as against the market price (CMP) of around Rs 45 in its stock research report dated Feb. 24, 2010.

Stock analysis

At the current market price of the stock Rs 45, the stock trades at a P/E of 5.51 times and 4.74 times for FY10E and FY11E respectively. The EPS of the stock is expected to be at Rs 7.79 and Rs.9.05 for the earnings of FY10E and FY11E respectively. On the basis of EV/EBDITA, the stock trades at 4.93 times and 4.91 times for FY10E and FY11E respectively.

Price to Book Value of the stock is expected to be at 1.16 times for FY09E and 0.93 times for FY10E.

MIC Electronics Ltd has bagged a 3 year long contract to supply video screen with Parramatta Eels National Ruby Club through their alliance with Sequity Pty. They have recently introduced three new products to be launched soon in India. These products have been designed around semiconductor devices form Texas Instruments (TI) including OMAP, MSP 430 and 16 channel LED Driver.

MIC is in joint venture with Hyperion Green Energy India, together they have secured the Rajahmundry Energy saving project for municipal street lighting. The company is looking at opportunities in other segments like sports, billboards and information display.

The company which is executing some works for railways currently is expecting the biggest ever LED contacts shortly from Indian Railways. The company has launched solar LEDs for rural areas which are yet to be connected to the power grids. These LEDs are cost effective and high performance oriented. Company has received purchase orders worth Rs 141.5 million.

It is a recommended stock to buy with target price of Rs 53 for medium to long term investment.