Centrum Research's research report on GNA Axles
GNA Axles Ltd (GNA) Q2FY18 consolidated results were good. Revenue grew by 18% YoY to ₹154 crore supported both by domestic (up 34.2%) and exports (up 16.2%). EBITDA was up 10% to ₹24 crore with margin contraction of 115bps to 15.5%. Lower finance cost (down 58% YoY) led to adj. net profit rising by 42% to ₹11 crore.
Outlook
Given the anticipated improvement in CV cycle recovery, slew of policy reforms on road infrastructure development (domestic front) and new product development, we maintain our positive view and Buy rating with a target price of ₹400 valuing the stock at 18x FY19E EPS.
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