Currently Cromton Greaves is trading at 22.4x FY11E consolidated earnings. On an EV/EBITDA basis, the stock of Cromton Greaves is trading at 13.8x FY11E numbers. We value the stock based on 21x FY11 earnings for the core business and Rs 10 per share for Avantha power and thus arrive at a price target of Rs 308 per share (280 earlier). We change our recommendation to ‘REDUCE’ for the Cromton Greaves stock.
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