Moneycontrol
May 18, 2017 01:27 PM IST | Source: Moneycontrol.com

Buy Atul Auto; target of Rs 550: Systematix

Systematix is bullish on Atul Auto has recommended buy rating on the stock with a target price of Rs 550 in its research report dated May 16, 2017.

Buy Atul Auto; target of Rs 550: Systematix

Systematix's research report on Atul Auto


Atul Auto (ATA) reported 4QFY17 results, with revenue being slightly higher than our estimate (+2%) although results were disappointing at the operating level as EBITDA and PAT were below our expectation(5%/10%). Realisation for the quarter increased 2% qoq to Rs 123,172 (flat yoy). This quarter’s performance was marred by the demonetisation impact, as the rural economy is yet to completely recover.


Outlook


Valuations appear reasonable, considering the 28% earnings CAGR over FY17-20e, excellent return ratios, healthy dividend payout history and debt-free status. We maintain a Buy rating with a revised target price of Rs 550 (18x FY19e EPS) (Rs575 earlier).


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