Buy Alicon Castalloy; target of Rs 1159: Sharekhan

Sharekhan's research report on Alicon Castalloy

Backed by its diversified business portfolio, the company aims to outperform the domestic automobile industry growth. Despite macro headwinds, the management has shared optimistic outlook for export revenue for FY24E backed by order inflow visibility. The management is looking for a gradual improvement in EBITDA margin and targets EBITDA margin at 14-15% level in next 3-4 years, as new orders is expected to deliver better EBITDA margin.

Outlook

We maintain our Buy rating on Alicon Castalloy Limited (Alicon) with an unchanged PT of Rs. 1,159, led by strong order book and margin expansion plans. The stock trades at a P/E multiple of 10.1x and EV/ EBITDA multiple of 4.5x its FY25 E estimates.

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