February 14, 2017 / 18:12 IST
Igarashi Motors (IGM) reported strong 3QFY17 results, with revenue slightly below our estimate, but EBITDA was 150bps higher than our estimate. PAT was lower than our estimate due to a higher depreciation related to a new manufacturing line and accounting change. Revenue increased 18% yoy to Rs1.2bn, driven by 17% volume growth and partly impacted by a shutdown due to cyclone and chief minister’s death.
Outlook
We expect CY17 to be a moderate growth year, with 15% volume growth and growth acceleration to start from CY18 on new capacity and orders. We estimate motor volume and profitability to grow >=2x in the next four years, with upcoming programs and application diversification. We maintain a positive stance, with an Accumulate rating and a target price of Rs 875.
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