Analyst cuts Depa rating

HC Alembic downgraded Depa, the Dubai-based interior contracting company, to neutral from overweight today, citing increased competition and the pressure on margins.

The analyst cut the target price on the company 17 per cent, from 69 cents to 57 cents a share, and slashed revenue forecasts for the company by 15 per cent for 2012  and 27 per cent in 2013.

Depa, which helped fit out the Burj Khalifa, the world's tallest building--and is in the midst of a long-running dispute to get paid for its work on the tower--has moved to expand outside the UAE in the last year, including the purchase of a company in Singapore.

But the company still has been hurt by political instability in the Middle East, which pushed down revenue 11 per cent in the first half of the year from the same period a year earlier.

"Slower execution and awards appear to be the new reality for MENA contractors given the regional political instability and weak global economic outlook," the analyst noted in its report.