Buy Pitti Engineering; target of Rs 1083: KR Choksey

KR Choksey is bullish on Pitti Engineering has recommended buy rating on the stock with a target price of Rs 1083 in its research report dated March 18, 2024.

Broker Research

March 19, 2024 / 15:59 IST

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KR Choksey's research report on Pitti Engineering

Pitti Engineering Limited (PEL) has forged a contractual arrangement with Bagadia Chaitra Industries Private Limited (BCIPL), situated in Tumkur, Karnataka. BCIPL specializes in the production of electrical laminations and aluminum die-cast rotors, catering to a diverse clientele in industries such as motors, alternators, pumps, appliances, and electric vehicles, with a primary focus on the South Indian market. The proposed transaction carries an Enterprise value of INR 1,249 Mn. The acquisition cost will be determined through adjustments to this Enterprise value, accounting for net debt and variations in working capital. BCIPL achieved revenues of INR 2,641 Mn for FY23, with an EBITDA of INR 141 Mn and PBT of INR 62 Mn.

Outlook

We assign a target price of INR 1,083 per share (INR 1,027 per share previously), with a 50.0% upside from current levels, to reflect improved scale and the Company’s plans to reduce debt. Accordingly, we maintain a BUY rating on the shares of Pitti Engineering.

For all recommendations report, click here