Exide Industries has target of Rs 107: Jigar Shah

Exide Industries has target of Rs 107, says Jigar Shah, Sr VP and HOR, Kimeng Sec India.

Shah told CNBC-TV18, "We have seen lot of volatility in Exide Industries margins off late. And in particular their ability to do pricing in replacement market given that they lost some share is doubtful. We are not factoring in a very large margin recovery although we are pricing in an EPS growth of 20% for FY13 versus FY12. We think that PE ratio of 26 times on the stock is very expensive and builds in a lot of hope which if not delivered, given that you have slump in the automotive market, industrial market and figures are not going to be very strong sounding, probably there will be some downward revisions in the earnings estimate down the line.”
He further added, “We feel cautious and we have a target price of Rs 107 based on sum of the parts, and we feel PE ratio of 26 times forwards is quite unreasonable.”