Shah told CNBC-TV18, "On Honda Siel Power Products we have a price target of Rs 510 to Rs 525, CMP is around Rs 434. The company is primarily engaged into manufacturing of gensets, water pumping sets and general engines, a huge demand we see there as far as India is concerned because India is a power deficit nation and there is going to be a huge demand for uninterrupted power supply."
He further added, "The modernization that we see going on in the agri sector is going to have huge demand for these water pumping sets and of course the focus on infrastructure is also going to pump up the demand. The relocating of its manufacturing facilities from Rudrapur to Noida is going to significantly decrease the logistic cost and thereby have a bump up in the margins. The fact that the parent company is planning to make India as its outsourcing hub, this will spell tremendous opportunities for Honda SIEL Power. Parent is trying to increase its presence over here in form of making India an outsourcing hub. So with that focus we feel that going forward, you are going to see a significant upside in terms of product demand."
Disclosure: We have buy coverage on the company and we have also recommended the stock to our clients, so they will definitely be in our clients' portfolios.
