Disa India (Disa), an 86.5% subsidiary of Disa Holding AG, is a market leader in
manufacturing modern foundry equipment with a 70% market share in India. As
per the June 2010 amendment of Securities Contract (Regulations) Act, all listed
companies should have a minimum of 25% public shareholding by June 2013.
Since the promoters stake in Disa is at 86.5%, we believe that the company may
opt for delisting rather than diluting its stake considering the company has tried
delisting in the past. If the delisting doesnt get through, still the stock is trading at
an attractive valuation of 12.8x its CY2013E EPS, owing to the companys
collaboration with Wheelabrators technologies, continuous expansion and
improving order book. We initiate coverage on the stock, with a Buy
recommendation and a target price of Rs3,353.

Download Full Report View Full Report in Browser