Karvy's research report on GoodyearThis segment witnessed weak growth in the last two years. GYIL is looking to target more on this segment and in the next few years, this segment would be the key area for the company to grow. It is looking to bring new products with new technologies such as the recently launched Assurance TripleMax for being among the top two-three players in passenger cars tyres segment. Considering the higher realizations in the after-market as compared to OEM segment, GYIL is looking to increase its share of revenue in both the farm segment and its focused segment- consumer vehicle segment. The share of after-market sales have improved in the recent past. Weak growth in CY15 in topline and bottomline has affected the RoEs. In CY17E, growth in business is expected to resume with operating profit margins at current levels. Besides this, being the company with good historic RoEs and healthy balance sheet numbers which are expected to be maintained, we initiate coverage on GYIL and assign PEx multiple of 10.1 to CY17E EPS and give “BUY” rating with a target price of Rs.547, with an upside potential of 17%.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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