Accumulate Swaraj Engines: PPFAS Research

1941 Investors following Swaraj Engines. Share this News with them.

0

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

Accumulate Swaraj Engines: PPFAS Research

Parag Parikh Financial Advisory Services (PPFAS) is bullish on Swaraj Engines and has recommended accumulate rating on the stock in its January 30, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy Indraprastha Gas; target of Rs 428: KRChoksey Accumulate Lupin; target Rs 520: Unicon Investment Accumulate JSW Steel; target Rs 725: PINC Research ALSO READ See previous views by Parag Parikh Financial Advisory Services See what other Experts & Brokerages are saying about Swaraj Engines See messages about Swaraj Engines Swaraj Engines BSE | NSE 29/05/12 Are Mutual Funds betting on Swaraj Engines?

Parag Parikh Financial Advisory Services (PPFAS) is bullish on Swaraj Engines and has recommended accumulate rating on the stock in its January 30, 2012 research report.

"Swaraj Engines Ltd. (SEL) reported a strong set of numbers for the quarter and 9-months ended December 2011. Rising raw material costs impacted the Y-Y performance but on a sequential basis, the company has reported an improved operating & net profit margins. Total income for Q312 reported a robust 27% Y-Y increase to Rs 1,176Mn as against Rs 926Mn for Q311 (& a 14% Q-Q growth). For the 9-months ended FY12, SEL posted a 25% Y-Y sales growth to Rs 3,307Mn as compared to Rs 2,637Mn for the corresponding period of last year. For December 2011, SEL's engine despatches to M&M-Swaraj Division totaled to 14,273 units as against 12,294 units in December 2010, translating to a 16% Y-Y rise (11% Q-Q growth)."

"Average realization/unit for Q312 was Rs 82,379.3/- (Rs 75,321.3/- for Q311), a rise of 9% Y-Y. In terms of expenses as a % of sales, raw material cost for Dec'11 increased by 252bps to 77.9% from 75.4% in Dec'10 resulting in a 179bps OPM dip. However, operating margins on a sequential basis have increased by 66bps on account of reduced personnel & other expenditure. Net profit for the current quarter reported an impressive Y-Y growth of 24% to Rs 141Mn as compared to Rs 113Mn for Q311 (20% Q-Q growth) on the back of rising other income and interest income. Tax rate for Dec'11 was at 31%. The company's phased capacity expansion programme totalling to 75,000 engines p.a. is on course & the 1st phase of 60,000 engines p.a. is expected to be completed by the end of FY12."

"Going ahead, with rising tractor demand from the core agriculture as well as non-agri related activities (transportation & other industrial requirements) will enhance Swaraj Engine's overall growth prospects (which were also reflected in the sequential margin improvement). At the CMP of Rs 430.3/- (FY11 cash per share = Rs 108/-) the scrip is trading at 10.6x TTM earnings of Rs 40.6/- We recommend an ACCUMULATE in the price range of Rs 400-420 per share," says PPFAS Research report.  

FIIs holding more than 30% 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