Buy Swaraj Engines; target of Rs 2570: ICICI Direct
ICICI Direct is bullish on Swaraj Engines has recommended buy rating on the stock with a target price of Rs 2570 in its research report dated June 15, 2017.
ICICI Direct's research report on Swaraj Engines
The Indian Meteorological Department (IMD) has upgraded its rainfall forecast for the upcoming monsoon season 2017 to 98% of LPA vs. the earlier forecast of 96% of LPA. Moreover, the geographical distribution is expected to be spatially well distributed with rainfall at 96% of LPA over North West India, 100% of LPA over Central India, 99% of LPA over South Peninsula and 96% of LPA over North East India.
We expect SEL to clock engine sales volume CAGR of 16% over FY17-19E to 110682 units in FY19E. We expect sales and PAT to grow at a CAGR of 17% and 20%, respectively, in FY17-19E. We value SEL at Rs 2570 i.e. 32x P/E on FY19E EPS of Rs 80.2 and assign a BUY rating on the stock.
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