Firstcall Research is bullish on Salzer Electronics and has recommended buy rating on the stock with a target price of Rs 257 in its research report dated September 23, 2015.
Firstcall research's reserach report on Salzer Electronics
Salzer Electronics Limited was established in 1985 is a leading player offering total and Customized Electrical Solutions in Switchgears, Wires & Cables and Energy Management business. It is the largest manufacturer of CAM operated Rotary switches & Wire Ducts in India, with a market share of 25% & 20% respectively. The company caters to a wide range of products with five in-House manufacturing facilities, located in Coimbatore and Himachal Pradesh. The company has a wide distribution network locally and globally, exporting to more than 40 countries. In India, Salzer markets its products through its own distributors and more than 350 local distributors of L&T. The company has a strong R&D team that focuses on developing and commercialzing the technologies of the products, and as a result, can offer total customized electrical solutions to its customers.
At the current market price of Rs. 223.60, the stock P/E ratio is at 13.90 x FY16E and 12.34 x FY17E respectively. Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.16.08 and Rs.18.12 respectively.Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 28% over 2014 to 2017E respectively.On the basis of EV/EBITDA, the stock trades at 7.01 x for FY16E and 6.34 x for FY17E.Price to Book Value of the stock is expected to be at 1.89 x and 1.64 x for FY16E and FY17E respectively. We recommend ‘BUY’ in this particular scrip with a target price of Rs. 257.00 for Medium to Long term investment.
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