This post is in continuation of my forecasting folly series (see here).
On Aug 19, 2011 Sharekhan put out a strong recommendation on Shiv Vani Oil stating
At the current market price, the stock is available at 3.1x its FY2013E earnings and an enterprise value (EV)/EBIDTA of 3.3x. We believe the moderation in order inflow has already been absorbed in the stock as the same has corrected by 60% in the last one year and by almost 36% in the last quarter. The stock is currently trading at attractive levels. Hence, we maintain our Buy recommendation on the stock with a price target of Rs340.
The then prevailing price was Rs.166.45.In less than 18 months, the stock has crashed to 62.6 i.e around 20% of the target price announced by Sharekhan !
Forecasting folly, anyone?
