Dolat Capital is bullish on Innoventive Industries possesses recommended buy rating around the stock that has a target of Rs 140 in their February 7, 2012 research report.

"Innoventive Industries's (IIL) consolidated profits, at Rs198mn (up 5% QoQ), was marginally below estimates of Rs 208mn caused by higher interest cost. Consolidated net sales rose 5% QoQ to Rs 1.97bn (Dolat Est: Rs 2.12bn), primarily led by strong increase in tubes and merchandise segment. Sales inside the OCTG and tubes & products divisions saw strong expansion of 48.8%YoY and 55.2% YoY to Rs 271mn and Rs 1,113mn respectively. EBITDA grew by 6.9%QoQ to Rs 510 mn. EBITDA margins have increased by 130bps QoQ to 25.9% on account of boost in proportion of upper margin tubes and OCTG business. Interest cost increased by 12.7%QoQ due to higher interest payout on forex loans."

"Sales volumes for CEW tubes and ERW tubes declined by 6.7% and 0.4% sequentially to 5970 tonnes and 7969 tonnes. Realizations for CEW and ERW tubes increased by 3.8%QoQ and 4.9%QoQ respectively. Membrane panel strips volumes increased by 9.2% QoQ whereas realizations increased by 16.8% to Rs 67154per tonne. IIL exports have doubled over last 9 months and currently constitutes 25% of the turnover. Standalone net sales rose 7.4% QoQ to Rs 1.59bn and EBITDA increased by 22.5% to Rs 403mn. EBITDA margins improved sequentially by 310bps to 25.2%. Interest expenses increased by 14.8% QoQ to Rs 147mn. Tax rate increased sequentially by 290bps to 19%. Standalone PAT rose 16% QoQ to Rs 172mn. IIL expects to accomplish its capacity expansion of CEW tubes by 3x by June 2012 and expects to realize 65% capacity utilization in FY13."

"We carry on and maintain our positive stance on IIL givens its cost leadership in CEW tubes through pilgering process and give attention to innovation to formulate untouched markets for its products. We expect IIL to report earnings CAGR of 37% over FY11-13E led by expansion in CEW tubes, strong traction in OCTG products and lowering of interest cost. We maintain our Buy on IIL at a cost target of Rs 140 (7x FY13EPS)," says Dolat Capital research report.  

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