Khambatta Securities is bullish on Subros has recommended buy rating on the stock with a target price of Rs 365 in its research report dated October 27, 2020.
Khambatta Securities' research report on Subros
2Q FY21 revenues declined by 8% y-o-y, witnessing significant improvement from the 87% y-o-y decline in 1Q FY21. Consequently, 1H FY21 saw a degrowth of 50% y-o-y which is attributable to the COVID-19 outbreak/lockdown and its impact on business operations and demand. While 2Q FY21 EBITDA increased by 21% y-o-y, 1H FY21 EBITDA was down 76% on account of the operating loss recorded in 1Q FY21. PAT bounced back strongly in 1Q FY21 with a y-o-y growth of 34%. Overall for the first half, PAT decline was recorded at 112% y-o-y.
Retaining a target P/E multiple of 22.0x, we increase our price target to Rs 365, maintaining a BUY rating with an upside of 38%.
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