Hot Chips: ABG Shipyard

ABG Shipyard BSE Code 532682 Volume 22236 CMP: Rs.660
ABG Shipyard is a strong counter that can be looked at as an investment option. It has the potential to give investors decent returns in the medium term.

The scrip has already corrected from its peak of Rs. 1,045 by as much as 37 percent. What make this counter attractive are the momentum and the good build-up in volumes on account of good investor interest.

Fundamentally, too, the counter looks very attractive at a PE of just 22x on trailing four quarters. The company has also come out with good quarterly results with a topline growth of 55 percent and a bottom line growth of 61 percent.

It is also expected to do well in the coming quarters as it had orders worth Rs. 8277 crore as on December 2007, which is 11.75 times higher than its FY07 sales. Hence, investors with short- to medium- term horizon can think of an exposure to this counter.

Long- term investment also makes sense.