Hold Tube Investments, target Rs 173: Firstcall Research
Firstcall Research has recommended a hold rating on Tube Investments of India (TIIL) with a price target of Rs 173. According to brokerage house, net sales and PAT of the company are expected to grow at a CAGR of 13 percent and 15 percent over 2012 to 2015E respectively.
Firstcall Research has recommended a hold rating on Tube Investments of India (TIIL) with a price target of Rs 173. According to brokerage house, net sales and PAT of the company are expected to grow at a CAGR of 13 percent and 15 percent over 2012 to 2015E respectively.
The report says, "TIIL was incorporated in 1949 & is a flagship company of USD 4.4 bn Murugappa Group. During the quarter, the robust growth of Net Sales is increased by 14.80 percent to Rs. 20772.40 million. TIIL continues to drive efficiencies in costs and working capital to improve its performance. Financiere C10, a Wholly Owned Subsidiary of the Company has achieved a turnover of Rs. 228 crores. Tube Investments of India's Bicycle division's has continued its expansion of retail network and 968 outlets have been established till date. TIIL has recommended a final dividend of 50 Paise per equity share of Rs. 2/- each for the FY ended March 31, 2013. TIIL has allotted 77592 shares to its employee's consequent to the exercise of options granted under the Company's ESOS. Net Sales and PAT of the company are expected to grow at a CAGR of 13 percent and 15 percent over 2012 to 2015E respectively."He further said, "The company's net profit declines to Rs.599.10 million against Rs.768.60 million in the corresponding quarter ending of previous year, a decrease of 22.05 percent. Revenue for the quarter rose 14.80 percent to Rs.20772.40 million from Rs.18095.20 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.3.21 a share during the quarter, registering 22.20 percent decrease over previous year period. Profit before interest, depreciation and tax is Rs.2505.30 millions as against Rs 2073 millions in the corresponding period of the previous year.""At the current market price of Rs.157.50, the stock price to earnings (P/E) ratio is at 9.29 times financial year 2014 (FY14E) and 8.58 times FY15E respectively. Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs.16.95 and Rs.18.35 respectively. Net Sales and PAT of the company are expected to grow at a compound annual growth rate (CAGR) of 13 percent and 15 percent over 2012 to 2015E respectively. On the basis of enterprise value to operating profit (EV/EBITDA), the stock trades at 14.28 times for FY14E and 13.12 times for FY15E. Price to Book Value of the stock is expected to be at 1.49 times and 1.27 times respectively for FY14E and FY15E. We recommend 'Hold' in this particular scrip with a target price of Rs 173 for Medium to Long term investment, " Firstcall Research added.Also Read: ABMoney upgrades Yes Bank to 'Buy'; target Rs 602Disclaimer: 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. 
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