Sintex Industries Consistent Performance – Add on Decline

The UPA government’s focus on increased investment in infrastructure, education and healthcare will likely drive demand for Sintex’s building products segment. We believe higher allocation to schemes such as Bharat Nirman, Sarva Siksha Abhiyan and other similar schemes will drive demand for pre-fabricated structures and monolithic
constructions. Signs of early revival in the economy indicate faster growth in demand for composites from the automotive and electrical industries.

As per management the various subsidiaries are expected to show stable performance with demand scenario not deteriorating further.

Existing Investors of Sintex Industries can hold on to the stock and others can Add on Decline sub-200 levels for a target price of Rs 280. The company is expected to report a fully diluted EPS of Rs 25 for FY10 and Rs 28 for FY 2011.

The average trading multiple for Sintex over the last five years has been around 10X one-year forward EPS.