ICICI Direct's research report on Reliance Defence
Revenues for Reliance Defence (RDEL) more than doubled YoY (up 25% QoQ) to Rs 122.7 crore (I-direct estimate: Rs 93 crore). The company reported a second consecutive quarter of growth, indicating better execution of the existing order book. Revenues in Q2FY17, Q3FY16 were at Rs 98 crore and Rs 50.5 crore, respectively.
Outlook
Infrastructure expertise of 861 acres of land with two dry docking facilities of 662 m x 65 m (Dry Dock-1) and 750 m x 60 m (Dry Dock-2 under construction) positions RDEL as a frontrunner for defence orders. We roll over our estimates to FY19E, valuing RDEL at 2.45x P/BV, arriving at target price of Rs 68. We recommend BUY.
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