Greaves Cotton may test Rs 120, says Bhavin Shah, CEO, Equirus Securities.
Shah told CNBC TV18, "Greaves Cotton is a multiple business, but the one that is, where they are seeing lot of interesting traction is the automobiles, where they are very strong player in the single cylinder diesel engine. So, kind of engines that are used in so called small commercial vehicles, the last miles kind of vehicles, the very small trucks like the Tata Zip, they are suppliers to Tata and perhaps they might be able to add more customers as well and that drive very strong growth to the company. We are looking at target price in access of Rs 120 compared to the stock currently trading in low to mid 80s."
He further added, "If you look at FY11, it is at 16 times. But on a FY12 basis only 9 times. So we are talking in the current year and beyond that basically about 15% kind of earnings growth is sustainable over next 2-3 years.
