Goodyear India (GIL) has performed reasonably well, thus f130ar in 9MFY21 in spite of the Covid-19 disruption. On a YTD basis, net sales are down ~11% YoY (Q2FY21, Q3FY21 growth at 6.0%, 20.7% YoY, respectively). Margins, however, are higher by ~400 bps YoY to 12.2% (includes multi-year high readings of 15.3% and 14.5% in Q2FY21 and Q3FY21, respectively). Consequent 9MFY21 PAT is higher by 22.5% YoY to Rs 93 crore despite loss after tax of Rs 4.5 crore in Q1FY21. The company also declared an all-time high interim dividend of Rs 80/share in December 2020.
OutlookWe expect 12.1% PAT CAGR in FY21E-23E. Healthy demand prospects across segments along with MNC parentage and strong B/S and return ratio profile (FY20; zero debt company with Rs 546 crore cash on books & >20% RoIC) continue to provide valuation comfort. We maintain BUY, valuing it at Rs 1,130, 16x P/E on FY23E EPS of Rs 70.7 (previous target price Rs 910).
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