Dolat Capital's research report on Sterling Tools
Sterling tools (STRT) number were broadly in line with estimates. Margins on a sequential basis have started showing signs of improvement at gross level. Considering that raw material pressure has been easing, we expect margins to remain stable / expand from current levels. This will b driven by increase in proportion of specialized fasteners. With capacity expansion on schedule, we believe that STRT will continue to grow on revenue front with strong margins. Effort to expand customer base will also augur well in long term.
Outlook
Considering the market outlook and increase in risk free rate, we have adjusted PER accordingly. We continue to like the story on a structural basis and reiterate BUY with a target price of ` 413.
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