Accumulate FAG Bearings; target of Rs 1457: Angel Broking

2274 Investors following FAG Bearings. Share this News with them.

0

Like this story, share it with millions of investors on M3

Accumulate FAG Bearings; target of Rs 1457: Angel Broking

Angel Broking is bullish on FAG Bearings India and has recommended accumulate rating on the stock with a target of Rs 1457 in its February 10, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Accumulate ICRA; target of Rs 1100: Emkay Accumulate Rolta India; target of Rs 90: PLilladher Buy Berger Paints; target Rs 128: SPA Research ALSO READ See previous views by Angel Broking See what other Experts & Brokerages are saying about FAG Bearings See messages about FAG Bearings FAG Bearings BSE | NSE 30/05/12 Are Mutual Funds betting on FAG Bearings?

Angel Broking is bullish on FAG Bearings India and has recommended accumulate rating on the stock with a target of Rs 1457 in its February 10, 2012 research report.

"FAG Bearings (FAG) reported a strong set of results for 4QCY2011, despite a marginal slowdown in the automotive and industrial sectors, the company's main growth drivers. Results were ahead of our estimates mainly due to strong top-line growth; the company's operating margin was, however, negatively impacted due to higher proportion of traded goods. We rollover to CY2013E and recommend Accumulate on the stock."

"FAG posted strong 31.4% yoy (4.8% qoq) growth in its top line to Rs350cr, despite sluggish automotive demand and slowdown in industrial activity. EBITDA margin declined by 150bp yoy (170bp qoq) to 18.1% due to the surge in raw-material cost, primarily on the trading part of the business. In our view, this could be because of INR depreciation against EUR, which resulted in a 480bp yoy increase in traded goods as a percentage of sales. However, the 380bp yoy decline in other expenditure as a percentage of sales prevented the margin from declining further. Nonetheless, led by robust top-line growth, net profit grew strongly by 27.3% yoy to Rs43cr. However, sequentially, it declined by 5.4% mainly due to EBITDA margin contraction."

"We maintain our positive stance on FAG, considering its strong parentage, debt-free status and cash balance worth Rs140/share on books. At Rs1,323, the stock is trading at 10x CY2013E earnings. We rollover to CY2013E and recommend Accumulate on the stock with a target price of Rs1,457, valuing the stock at 11x CY2013E earnings," says Angel Broking research report. 

Public holding more than 90% in Indian cos

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.

To read the full report click on the attachment