Significant slowdown in India’s garment exports, rupee appreciation is the key concern said the report. 10%-19% downward revisions to FY08E-10E earnings to factor in this slowdown and stock’s 25% run-up over last 3 months. Target price reduced to Rs237 based on 10x FY09E PE – implies 6% downside.
Given the stock’s low free float (30%), we expect Blackstone’s 20% open offer at Rs275/share to provide near-term support. Investors can tender their shares in the open offer.