Buy Redington India; tgt Rs 451: CLSA " FII " feb 5

CLSA maintains buy rating on Redington India, with a target price of Rs 451, in its report dated 04 February, 2008. "Redington’s investment in setting up an NBFC in it’s domain of choice, IT product distribution, will enable it to leverage beyond the earlier permissible limit of 1:1 debt-equity and lead to ROAE on consolidated basis to improve to 26% in FY10CL from the previously likely 22-23%. With a capital-intensive business model, strong vendor relationships, infrastructure investments and customer support capabilities, the company is slated to grow EPS at a Cagr of 38%. Our SOTP based target price of Rs 451 indicates 36% upside on a 12M basis from CMP."