Feb 16, 2017 11:36 AM IST | Source: Moneycontrol.com
Buy Balkrishna Industries; target of Rs 1503: Edelweiss
Edelweiss is bullish on Balkrishna Industries has recommended buy rating on the stock with a target price of Rs 1503 in its research report dated February 13, 2017.
Edelweiss' research report on Balkrishna Industries
Balkrishna Industries’ (BKT) Q3FY17 result highlight again was the strong 22% YoY spurt in volumes to 40,415MT (21% in Q2FY17). Revenues, at INR 8.8bn (net of excise), jumped 26% YoY. Growth was driven by higher share of replacement revenues and OTR segment with Americas driving growth. EBITDA margin, at 31.5%, reduced QoQ from 33.0% as it was impacted by the increase in rubber prices.
While margins are expected to marginally correct due to jump in raw material prices, we see PAT increasing 18% YoY in FY19E, RoCE expansion of 460bps (Over FY17-19E) and expect it to become near debt free. We value BKT at 15.0x FY19E EPS giving us TP of INR 1,503 (INR 1,231 earlier). Maintain ‘BUY’.
For all recommendations, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.