First call research is bullish on Igarashi Motors INDIA Ltd and has recommended buy rating on the stock with a target price of Rs 590, in its research report dated Feburary 09, 2016.
First call research report on Igarashi Motors Ltd
Igarashi Motors Ltd is specialized in the design & manufacture of small, permanent magnet DC motors and gear motors. The company’s Net profit rose by 15.24% y-o-y of Rs. 147.33 million in 3rd quarter of FY16 compared to Rs. 127.85 million in the corresponding quarter of previous year.In Q3 FY16, net sales increased by 3.41% y-o-y to Rs. 1053.04 million against Rs. 1018.29 million in Q3 FY15. During the quarter, operating profit increased by 2.70% y-o-y at Rs. 281.10 million as against Rs. 273.72 million in the corresponding quarter of the previous year. Profit before tax (PBT) at Rs. 225.53 million in Q3 FY16 compared to Rs. 192.55 million in Q3 FY15, registered a growth of 17.13% y-o-y. Net sales for the nine months ended Dec 31, 2015 was at Rs. 3183.56 million, registered a growth of 12.40% compared to Rs. 2832.40 million for the nine months ended Dec 31, 2014. Net profit grew by 41.31% to Rs. 450.89 million for the end of 9M FY16 compared to Rs. 319.07 million for the end of 9M FY15. Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 37% over 2014 to 2017E respectively. PEER GROUPS CMP MARKET CAP EPS P/E.
At the current market price of Rs. 514.75, the stock P/E ratio is at 25.01 x FY16E and 20.80 x FY17E respectively. Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.20.58 and Rs.24.74 respectively.Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 37% over 2014 to 2017E respectively. On the basis of EV/EBITDA, the stock trades at 13.02 x for FY16E 10.76 x for FY17E. Price to Book Value of the stock is expected to be at 5.25 x and 4.47 x respectively for FY16E and FY17E. We recommend ‘BUY’ in this particular scrip with a target price of Rs.590.00 for Medium to Long term investment.
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