Arihant Capital's research report on Pitti Engineering
Pitti Engineering Ltd (PEL) was established in 1983, headquartered in Hyderabad, Telangana. PEL is engaged in manufacturing of Electrical steel laminations, Motor cores, Sub assemblies, Die-Cast rotors, Press Tools and machining of metal components. The company has three manufacturing plants which are strategically located in Hyderabad and Aurangabad. The plants has sheet metal capacity of 41,000 metric tonnes per annum (MTPA) and 3,77,196 machining hours per annum as on Q3FY22. The company is currently undergoing INR 270cr capex to increase the capacity to meet industry demands. The company exports the products to over 12 countries and exports revenue contributed 34% of sales in Q3FY22. The company has partnered with customers and supplying the components as per their requirements. The order book stood at INR 987cr as on Q3FY22.
Outlook
We have discounted the cash flows using WACC and value the company at INR 438 per share. We initiate coverage with a “BUY” rating at a Target Price of INR 438 per share; an upside of 42.6%.
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