Sintex Industries has fell a lot lately due to market sentiments being weak. I personally feel that Sintex Industries at current levels of around 160 is a sound investment pick. The reason being limited downside and good expected growth from the company for the next two years. The only reason Sintex can fall further downwards is if markets crash to new lows then even Sintex won’t be spared.

Sintex Industries is seen growing at a CAGR of 20-25% over the next two years. Sintex posted an EPS of 16.8 for FY11 and is expected to post another 20% growth in bottomline. Expected EPS for FY12 stands at 20+. With the stock trading at 160 odd levels, P/E multiple comes to 8 for FY12 which is very cheap. Sintex has a long term average P/E of 12 – 14 and so there is no reason as to why Sintex would not try to reach that kind of P/E multiple when markets recover. If sintex manages to post the growth as expected then we can easily see targets of 240 in medium term and even 300 in the long run. But to make money in this scrip, one needs to have patience and hold it for a long term period.

Buy Sintex Industries with a target price of 240 from a medium term view.

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