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Buy Honeywell Automation India; target of Rs 49,750: Sharekhan

Sharekhan is bullish on Honeywell Automation India has recommended buy rating on the stock with a target price of Rs 49,750 in its research report dated November 09, 2022.

November 13, 2022 / 09:55 PM IST
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Sharekhan's research report on Honeywell Automation India

Q2FY2023 performance was ahead of our expectations on the profit front, while it missed the mark on the revenue front. Revenue rose by 7.7% y-o-y to Rs. 794 crore (versus our estimate of Rs 855 crore). Operating profit increased by 19% y-o-y to Rs. 128 crore (in-line with estimate) due to a proportionate decline in RM cost and other expenses. Consequently, OPM improved by 152 bps y-o-y to 16.1% (versus our estimate of 15.7%). Net profit was up 38% y-o-y to ~Rs. 118 crore (versus our estimate of Rs. 114 crore). Supply-chain disruptions have not been completely resolved; however, they are improving gradually, which bodes well for growth.


We retain our Buy rating on the stock with an unchanged PT of Rs. 49,750, as improving growth prospects across end-user industries, asset-light business model, strong parentage, and healthy balance sheet with cash and bank balance of Rs. 2,096 crore (as on Q2FY23) justify the stock’s premium valuation.