November 25, 2016 / 12:42 IST
The effect of demonetisation will impact the discretionary spending as consumers with a liquidity crunch may postpone the purchase. The current pace in demand revival in rural economy on account of good monsoon will get delayed. A slow pace in real estate demand will also add uncertainty. We therefore reduce our revenue estimate for FY17E /FY18E by 2%& 3% respectively.
We expect the volume growth is likely to get impacted due to the liquidity crunch. It seems that the recent correction in price has largely factored all the near term negatives. We value APNT at 37x (5yr. avg) P/E and roll our estimate to FY19E, with a target price of Rs 1,108. We upgrade our rating to ‘BUY’ from ‘Reduce’ as we believe that near term negatives are largely factored in the stock price.
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