Moneycontrol PRO
HomeNewsBusinessStocksBuy Swaraj Engines; target of Rs 1110:ICICIDirect

Buy Swaraj Engines; target of Rs 1110:ICICIDirect

ICICIDirect is bullish on Swaraj Engines and has recommended buy rating on the stock with a target price of Rs 1110 in its research report dated January 27, 2016.

January 29, 2016 / 17:15 IST
     
     
    26 Aug, 2025 12:21
    Volume
    Todays L/H
    More

    ICICIDirect's research report on Swaraj EnginesSwaraj Engines (SEL) reported a muted Q3FY16 performance primarily on the back of prior build-up of inventory at its key customer i.e. M&M resulting in subdued topline and profitability Sales volumes (engines) for the quarter came in at 12845 units (up 5.7% YoY) primarily normalising the robust sales in Q2FY16 Net sales in Q3FY16 came in at | 105.1 crore (up 3.8% YoY). EBITDA for the quarter came in at | 12.8 crore with corresponding EBITDA margins at 12.1%. PAT in Q3FY16 was at | 8.4 crore SEL has a lean balance sheet with net cash of | 182 crore (FY15). Average RoCEs and RoEs in the last five years (FY11-15) were at 35% and 28%, respectively. SEL also has good payout ratios with average payout in the last three years at 72.7% with FY15 dividend at | 33/share (dividend yield ~4%). On the back of muted Q3FY16 numbers and FY16E being a washout year for the domestic tractor industry, we have downward revised our sales and profitability estimates for SEL over FY16E-17E while introducing numbers for FY18E. We expect engines sales at SEL to grow at a CAGR of 12.1% in FY16E-18E to 79260 units in FY18E (63079 units in FY16E). We expect sales and PAT to grow at a CAGR of 12.9% and 16.4%, respectively, in FY16E-18E. We have valued SEL at | 1110 i.e. 22x P/E on FY17E and FY18E average EPS of | 50.4 with a BUY recommendation on the stock. The company is essentially a quality play and should be held in one’s portfolio with a long term investment horizon. For all recommendations, click here 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.

    first published: Jan 29, 2016 05:15 pm

    Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

    Subscribe to Tech Newsletters

    • On Saturdays

      Find the best of Al News in one place, specially curated for you every weekend.

    • Daily-Weekdays

      Stay on top of the latest tech trends and biggest startup news.

    Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347