ICICI Securities is bullish on ISGEC Heavy Engineering recommended buy rating on the stock with a target price of Rs 330 in its research report dated July 08, 2020.
ICICI Securities research report on ISGEC Heavy Engineering
ISGEC Heavy Engineering’s (ISGEC) management, in their concall, shared confidence on buoyancy in certain segments of domestic market like FGD, refinery, civil infra, petchem, fertilisers, hospitals and airports. Pace of execution continues to be slow, impacted by labour unavailability (currently at 75%). The impact on manufacturing margin in Q4FY20 was due to delay in dispatch of equipment and management sees sustainable margins in manufacturing segment at 9% and EPC segment at 5%. The directors’ remuneration will be cut by 75% and a 5-30% cut in the salary of white collar employees (> Rs800,000 per annum salary) is expected to reduce overall staff costs by ~15% for FY21. Current orderbook at Rs69bn (1.4x TTM sales) provides growth visibility.
We factor-in 8% standalone earnings growth over FY20-FY22E and maintain BUY rating on the stock with an unchanged SoTPbased target price of Rs330.
For all recommendations report, 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.