Accumulate Goodyear India; target of Rs 622: Angel Broking

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26 Aug, 2025 12:21

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Angel Broking's report on Goodyear IndiaNote- Goodyear India (GIL) is shifting from calendar year reporting followed until now, to financial year reporting. Hence FY2016 will consist of five quarters. GIL reported a disappointing set of numbers for 3QFY2016. Its top-line witnessed a 5.0% yoy decline to `382cr. The raw material cost declined by 495bp yoy to 63.4% of sales, while employee and other expense increased by 193bp yoy and 100bp yoy to 7.7% and 16.9% of sales respectively. The EBITDA margin expanded by 202bp yoy to 11.9%. On the back of lower raw material cost, the net profit for the quarter increased by 15.2% yoy to `29cr.Outlook and valuation: We expect the company’s top-line to be at `1,888cr and `1,680cr in FY2016E and FY2017E respectively. Raw material cost is expected to remain stable over FY2016E-17E resulting in EBITDA margin of 12.1% in FY2016E and 11.9% in FY2017E. Consequently, we estimate the net profit to be at `130cr in FY2017E. At the current market price, the stock is trading at a PE of 10.1x its FY2017E earnings. On a TTM basis, GIL is one of the cheapest MNCs available as it trades at a PE of 14.0x while other MNCs (having market cap of `1,000cr-`5,000cr) trade above the 20.0x mark (median of 33.1x). We maintain our Accumulate rating on the stock and assign a target price of `622 based on a target PE of 11x for FY2017E, says Angel Broking research report.For all recommendations, click hereDisclaimer: 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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