Buy GMM Pfaudler; target of Rs 662: Axis Direct

Axis Direct's research report onGMM Pfaudler

GMM Pfaudler Ltd (GMM) in 4QFY17 posted revenues of Rs 79.5 Cr. (up 34% Y-o-Y, up 21% Q-o-Q) due to consistent growth in both Glass Line Equipments (GLE) and Non-GLE (Heavy Engineering and Proprietary products) segments.

Outlook

GMM Pfaudler is well positioned in the industry owing to high entry barriers and market leadership position in GLE business, strong brand name, sticky clientele, growing Non-GLE business, parent and subsidiary support, strong balance sheet and thus deserves premium valuations. We value GMM Pfaudler at 22x FY19E given the growth prospects and maintain buy with a target price of Rs. 662(12% upside).

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