Sharekhan's research report on Schaeffler India
SIL’s Q1CY2022 performance was led by higher-than-expected expansion in EBITDA margin, though revenue marginally missed expectations. Exports is a high-growth area for SIL, given the pedigree of its parent company. Greater localisation and focus on market share gains would aid revenue and EBITDA growth going forward. We expect its earnings to report a 33.4% CAGR during CY2021-CY2023E. The stock trades at a P/E of 31.3x and EV/EBITDA of 19.8x its CY2023E estimates.
We retain our Buy recommendation on Schaeffler India Limited (SIL) with a revised PT of Rs. 2,650, led by a strong outlook for its automotive and industrial businesses and continuous improvement in margin profile.
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