Moneycontrol
Jun 15, 2017 03:19 PM IST | Source: Moneycontrol.com

Buy Rane (Madras) Ltd; target of Rs 637: Way2wealth

Way2wealth is bullish on Rane (Madras) Ltd has recommended buy rating on the stock with a target price of Rs 637 in its research report dated June 12, 2017.

Buy Rane (Madras) Ltd; target of Rs 637: Way2wealth

Way2wealth's research report on Rane (Madras) Ltd


During the year, the Company witnessed strong demand from Passenger Car and Commercial Vehicle segments for its steering and linkages division. The Company is also seeing higher demand for its diecasting products from International and Indian customers. Its second Die casting plant in Hyderabad has ramped up production which has resulted in robust volume growth in FY17.


Outlook


At Rs 466, RML is trading at a PE of 9.5x FY19E and EV/EBITDA of 5.1x FY19E. We find RML’s current valuation attractive given a) High quality business run by Strong pedigree management with world class manufacturing facilities serving top notch global customers 2)65% PAT CAGR over FY17-19E b) ROE expansion from 11.2% to 23.5% over FY17-19. We reiterate our BUY rating on the stock and a target price Rs 637 (13xFY19 PER).


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