Buy Escorts; target of Rs 91: ICICIdirect.com

15007 Investors following Escorts. Share this News with them.

0

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

Buy Escorts; target of Rs 91: ICICIdirect.com

ICICIdirect.com is bullish on Escorts and has recommended buy rating on the stock with a target of Rs 91 in its October 14, 2011 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy Career Point; target of Rs 320: A C Choksi Buy Kajaria Ceramics; target of Rs 143: Emkay Accumulate Infosys; target Rs 2,800: Emkay ALSO READ See previous views by ICICIdirect.com See what other Experts & Brokerages are saying about Escorts See messages about Escorts Escorts BSE | NSE 01/06/12 Are Mutual Funds betting on Escorts?

ICICIdirect.com is bullish on Escorts and has recommended buy rating on the stock with a target of Rs 91 in its October 14, 2011 research report.

"Farm equipment and engineering goods manufacturer Escorts, announced that it has signed an exclusive agreement with Spanish firm "Ingeteam Traction" to provide traction systems to Indian Railways. Ingeteam Traction designs and supplies complete traction, control and auxiliary systems for trams, EMUs, locomotives and high-speed trains. The agreement with Ingeteam enables Escorts to foray in the niche domain of rail traction systems. Ingeteam is a market leader specializing"

"The Indian railways inline with its vision 2020 has sought technological upgradation in various traction systems. Escorts will initially supply traction control converter and locomotive control converter with design and manufacturing of internal traction systems for rolling stock. The product has large-scale application on electric locomotives, diesel-electric locomotives, diesel electrical multiple units (DEMU) and electric multiple units of Indian Railways. The traction systems can also be used on metro rail coaches. The tie-up with Escorts marks the foray of Ingeteam into India, to be a part of the large scale expansion plans of the Indian railways, providing open and first technological level solutions."

"Escorts sold 63,870 units in SY11 recording a modest 6.3% YoY growth. Volumes for Q4SY11 advanced to 15,266 (up 7.4% QoQ) which could have been bettered if not for the company's limited presence in the robust southern & western regions. Competitors like M&M, John Deere and TAFE have higher penetration in these areas. However, in the coming fiscals we expect the company to improve performance in these geographies aided by flexible priority sector lending rates."

"We have factored market share pressures emanating from increasing competition and slow operational turnaround. The stock is trading at | 80, 4.8x SY13E EPS. We have valued it on an SOTP basis with a target price of Rs 91. We are giving a BUY rating on the stock with a 14% upside potential. We suggest investors who entered at higher levels to hold the stock, recommend waiting for Q4SY11E results to make fresh entry," says ICICIdirect.com 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