Report on Nitin Fire - Buy Nitin fire

Keep Buying on Nitin Fire for target of Rs.735, Current Market Price-Rs.560
Anand Rathi has maintained a ‘buy’ rating on Nitin Fire Protection Industries after factoring in the inorganic growth strategy of the company which, according to the brokerage, is ‘on course’. According to the brokerage, Nitin Fire has acquired a 40% stake in a fire protection company in Dubai, New Age, which would give the company access to the fast growing West Asian (the Middle Eastern) markets.
The report further adds that the company would fund the acquisition through internal accruals and by raising debt. “We expect the acquisition to be EPS accretive,” it says. Further, loss prevention certification board (LPCB) approval could be the next big thing, according to the report. “Nitin Fire has recently obtained LPCB approval for its ozone-friendly HFC 227ea and Novec 1230-based fire-suppression systems,” says the report adding that the “approval opens up a $1.5 billion worldwide opportunity” for Nitin Fire. However, the brokerage has lowered its topline and bottomline FY08 estimates by 16.4% and 11.2%, respectively, on the back of a delay in the commissioning of the plant.

From Economice Times