Buy Sundram Fasteners: target of Rs 650: Sharekhan
Sharekhan is bullish on Sundram Fasteners has recommended buy rating on the stock with a target price of Rs 650 in its research report dated December 18, 2020.
December 21, 2020 / 03:13 PM IST
Sharekhan's research report on Sundram Fasteners
Interaction with the management indicates that strong growth traction in automotive industry led by growth in sales of passenger cars, light commercial vehicles, tractors and two wheelers, with the exception of MHCVs. Export and non-automotive segments continue to be the focus area with a strategy to de-risk business from cyclicality. We expect SFL’s earnings to grow by 69.4% in FY2022E and 40.6% in FY2023E, driven by a 25.2% CAGR during FY2021E-23E and a 310-bps improvement in EBITDA margin. Stock trades attractively at P/E multiple of 22.1x and EV/EBITDA multiple of 13x its FY2023E estimates.
We maintain our Buy rating on Sundram Fasteners Limited (SFL) with a revised PT of Rs. 650, factoring in better multiples on a strong traction in business outlook and an upgrade in earnings estimates.
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