February 22, 2017 / 13:32 IST
Headquartered in New Delhi, RCI Industries & Technologies (RCI or the Company), with two manufacturing plants at Baddi (Himachal Pradesh), manufactures copper wire, lead-free solders, tin-alloy solders, copper, brass and stainless steel-strips/ foils/ coils. It also trades, internationally and domestically, in ferrous and non-ferrous metals for a range of electrical and industrial applications.
Outlook
We initiate a Strong Buy on RCI at the CMP of Rs. 232 with a target price of Rs. 350, 50% upside potential. Our target price is based on EV/EBITDA and PE. At the CMP, the stock trades at 7.1x and 5.9x FY18e and FY19e EV/EBITDA respectively and 10.5x and 8.3x EPS. With the company‟s focus on manufacturing, its shift in product mix and positive operating cash-flows, we believe the stock would be valued at 7.8x EV/EBITDA for FY19e and a PE of 11.3x on FY19e EPS.
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