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Buy JBF Industries Ltd

October 25, 2007

JBF Industries reported an excellent set of Q2FY08 numbers. The company’s earnings estimates have been revised upwards and continue to recommend BUY with increased price target of Rs.250 .

Net sales for Q2FY08 were at Rs.5.3 bn. Up by 76.2% YoY. EBIDTA margin during Q2FY08 was up by 190 bps at 14.0%. EBIDTA for Q2FY08 was at Rs.742 mn up by 72.0% YoY and PAT is at Rs 571 mn up 68%.

The company has successfully commissioned it Ras-Al-Khaimah, UAE project for polyester resin packaging (PET) and polyester films manufacturing. Main raw materials for JBF are PTA and MEG and globally the scenario is turning favorable for JBF.

Expect JBF to report higher EPS of Rs.20.1 in FY08E moving upto Rs.29.1 in FY09E. We recommend a BUY with a price target of Rs 250.

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