Buy Lumax Autotech; target of Rs 208: HDFC Securities
HDFC Securities is bullish on Lumax Autotech has recommended buy rating on the stock with a target price of Rs 208 in its research report dated February 11, 2019.
February 14, 2019 / 02:05 PM IST
HDFC Securities' research report on Lumax Autotech
Lumax Auotech (LATL) continued its double digit growth trajectory (Revenue/PAT grew 15/33%) in 3Q despite a slowdown in the OEM segment. LATL’s growth is driven by the aftermarket segment as well as higher other income (relating to designing and mould modification charges). We re-iterate our Buy rating due to our expectations of double digit revenue growth (12-13%) over FY20-21 as LATL is diversifying across product segments and margins are expanding on a richer mix (higher aftermarket sales).
We have reduced EPS estimates by 5% over FY19-21E to factor in the moderation in 2W demand and are lowering our target PE Multiple to 16x. We Maintain BUY with a revised TP of Rs 208 (16xDec-18).
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