Moneycontrol
Apr 21, 2017 03:17 PM IST | Source: Moneycontrol.com

Buy Force Motors; target of Rs 5350: HDFC Securities

HDFC Securities is bullish on Force Motors has recommended buy rating on the stock with a target price of Rs 5350 in its research report dated April 20, 2017.

Buy Force Motors; target of Rs 5350: HDFC Securities

HDFC Securities' report on Force Motors


Recent interactions with dealers across the country have convinced us that the luxury car market in India has great scope for growth. Sales of luxury cars account for less than 1.3% of the Indian car market, reflecting a huge untapped space. Aspirational demand from India’s middle class has led to proliferation of dealerships of luxury car brands (like Audi, BMW, Mercedes, Bentley, Bugatti, Rolls Royce and Porsche) into Tier II cities.


Outlook


Given its steady relationships with two luxcar brands, we maintain Buy on FML with a TP of Rs 5,350 (21x FY19E). Our long-term aspirational TP is Rs 8,556 (25x FY20E, 21/25% CAGR over FY16-20E).


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