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Last Updated : Feb 15, 2018 02:01 AM IST | Source: Moneycontrol.com

Buy Solar Industries India; target of Rs 1340: KR Choksey

KR Choksey is bullish on Solar Industries India has recommended buy rating on the stock with a target price of Rs 1340 in its research report dated February 09, 2018.

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KR Choksey's research report on Solar Industries India


Company during the quarter witnessed a healthy top-line growth of 10.5% y-o-y and 14% q-o-q at INR 4657 mn, as against our estimates of INR 4990 mn. Packaged explosive segment for SIIL continued to thrive with a volume growth of 23% y-o-y for Q3FY18 and 19% y-o-y for 9MFY18. Further, overseas and exports business continued to fare well with revenues growing by 25.07% y-o-y during the quarter and 43.93% y-o-y for 9MFY18.


Outlook


We estimate ROE/ROCE to surge to 27.3%/26.9% by FY20 from 20.6%/21.3% in FY17. Further, increased budgetary allocation by the GOI towards road construction and bridges (~INR 12,14,250 mn), pick-up of prodigious projects like Bharatmala and Sagarmala coupled with indigenous manufacturing of defense equipments, higher infrastructure activities and ramp-up in domestic coal production on account of reduction in imports should prove beneficial for the company. On the valuation front, we assign a P/E of 32X on its FY20E earnings of INR 41.9 resulting into a target price of INR 1340/share translating into an upside of 28% from CMP of INR 1050/share. We have a “BUY” rating on the stock. At CMP of INR 1050, SIIL trades at 42x FY18 EPS of INR 24.6, 33.8x FY19E EPS of INR 31 and 25.1x FY20E EPS of INR 41.9.


For all recommendations report, click here


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First Published on Feb 9, 2018 05:36 pm
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