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May 26, 2012, 11.20 AM IST | Source: Moneycontrol.com

Buy FAG Bearings; target of Rs 1782: Firstcall Research

Firstcall Research is bullish on FAG Bearings and has recommended buy rating on the stock with a target of Rs 1782 in its May 21, 2012 research report.

Firstcall Research is bullish on FAG Bearings and has recommended buy rating on the stock with a target of Rs 1782 in its May 21, 2012 research report.

“FAG Bearings India Limited, a member company of FAG group of Germany - is a leading player in the Indian Bearing industry. The company manufactures a very wide range of bearings conforming to the stringent international quality standards. FAG India's manufacturing plants, located at Vadodara, Gujarat, feature the most advanced manufacturing technology. The company is certified to ISO/TS 16949, ISO 9001, and ISO 14001 standards. FAG India is a leading OEM supplier to the automotive industry, mechanical and electrical engineering industry, besides the Railways. In 1997, FAG Bearing India Limited set up the country's first 100% EOU for bearings. Bearings produced at the EOU plant have gained ready acceptance and recognition of customers located in Europe, USA, Asia and Africa. FAG's joint venture company - FAG Roller Bearings Private Limited - produces taper roller bearings at Chakan near Pune.”

“FAG Bearing India Ltd disclosed a phenomenon rise in standalone net profit for the quarter ended March 2012. During the quarter, the profit of the company surged 8.00% to Rs 463.10 million from Rs 428.80 million in the same quarter previous year. Net sales for the quarter rose 17.30% to Rs 3633.00 million from Rs 3097.20 million, when compared with the prior year period. It reported earnings of Rs 27.86 a share during the quarter, registering 8.00% increase over previous year period.”

“At the current market price of Rs 1549.90, the stock is trading at 12.42 x CY12E and 10.90 x CY13E respectively. Earning per share (EPS) of the company for the earnings for CY12E and CY13E is seen at Rs.123.58 and Rs.140.84 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 19% and 24% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 7.75 x for CY12E and 6.82 x for CY13E. Price to Book Value of the stock is expected to be at 2.73 x and 2.19 x respectively for CY12E and CY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 1782 for medium to long term investment,” says Firstcall Research report.

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