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Last Updated : Nov 21, 2016 02:15 PM IST | Source:

Buy Elgi Equipments; target of Rs 220: Axis Direct

Axis Direct is bullish on Elgi Equipments has recommended buy rating on the stock with a target price of Rs 220 in its research report dated November 17, 2016.

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Todays L/H

Axis Direct's research report on
Elgi Equipments

Consolidated revenue was flat at Rs 3.4 bn (1% growth YoY), which was predominantly due to cessation of certain international operations. Standalone revenue growth remained stable at 10% YoY (3% below estimates).Elimination of losses from certain international subsidiaries along with operating efficiencies in domestic business led to 300 bps YoY improvements in operating margin to 11%. Lower depreciation, interest burden led to consolidated PAT growth of 80% YoY on a truncated base.

Capex for FY17 would likely be lower than the previous guidance (of Rs 300 mn). Also, management intends to achieve debt free status by FY18. To revitalize the front-end operations, BCG has provided a two pronged strategy including revamping the brand image. Management believes that the full impact of the same will be witnessed in FY17-18.

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First Published on Nov 21, 2016 02:15 pm
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