Mahindra CIE (MCIE) is among the top global forging players with a strong presence in both Europe and India. Currently 2/3 of the revenue comes from Europe (split btw CV’s & PV’s) while rest from India (PVs).
Here are the top technical picks by Geojit Financial Services.Mahindra CIE Automotive
Rating: Buy CMP: Rs245 TP: Rs291Mahindra CIE (MCIE) is among the top global forging players with a strong presence in both Europe and India. Currently 2/3 of the revenue comes from Europe (split btw CV’s & PV’s) while rest from India (PVs).
Diversified product portfolio, broad based customer profile and strong geographical presence establish MCIE a preferred choice for the OEMs. Scaling up new product line to drive growth in two wheeler business will paint positive outlook to the company. We expect EBITDA margin to improve by 350bps over CY16-18E led by cost control initiatives and capitalizing the OEM mix. Consolidated Revenue/PAT to grow at 14%/57% CAGR over CY16-18E led by increase in order book from OEMs & recent acquisition (BFPL).
Rating: Accumulate CMP: Rs138 TP: Rs148
Triveni turbine Ltd is the market leader in steam turbine upto 30MW with dominant 60%share despite strong competition from Siemens.
Rising export market penetration, scale up of JV GETL and healthy order enquiry pipeline provides better outlook. Further, strong return ratios (ROE-35% FY17) with debt free status and better EBITDA margin of 22% in FY17 attracts premium valuation. We expect order inflow to grow at a CAGR of 22% over FY17-19E and stimulate revenue/PAT with a CAGR of 9%/16% respectively. Our target price is based on a PE of 30x FY19E EPS.
Aurobindo Pharma Ltd.
Rating: Buy CMP: Rs759 TP: Rs817
Aurobindo Pharma (Auro) is one of the largest vertically integrated pharmaceutical companies. Over the past few years, the company has drastically shifted its focus from APIs business to generic formulations.Given robust product portfolio, strong approval and launch pace, no pending regulatory rulings and upbeat performance from EU business we maintain ‘BUY’ rating.