YES Securities is bullish on Apar Industries has recommended buy rating on the stock with a target price of Rs 384 in its research report dated June 28, 2020.
YES Securities' research report on Apar Industries
Apar Industries reported a topline de-growth of ~26% yoy during Q4 FY20 with weakness across its segments. While the Conductor segment reported 37% decline in revenues, Oil and Cables segment reported de-growth of ~22% and ~12% respectively. The Company was unable to carry inspections before dispatch during last few days of Mar’20 which also impacted deliveries and revenue booking. Operating margin on consolidated basis improved 35bps yoy (to 5.8%) largely driven by the sharp improvement in profitability in the Conductor segment. Increasing share of high margin High Efficiency Conductor (HEC; contributed ~15% to Conductor revenues) supported margins. During the quarter, the company received new orders worth ~Rs.5.2 bn in Conductors. New order inflows was significantly lower yoy as Company as it couldn’t take up some orders requiring immediate dispatch owing to capacity constraints. Considering the COVID impact across segments, we cut our estimates for FY21 and FY22.
We believe, the Company see gradual pick up in supplies going forward. Focus on increasing the share of value added products to augur well in managing profitability. We maintain our BUY rating on the stock for revised target of Rs.384.
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