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Last Updated : Feb 07, 2019 03:18 PM IST | Source: Moneycontrol.com

Buy Swaraj Engines; target of Rs 1828: HDFC Securities

HDFC Securities is bullish on Swaraj Engines has recommended buy rating on the stock with a target price of Rs 1828 in its research report dated January 28, 2019.

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HDFC Securities' research report on Swaraj Engines


Swaraj Engines Ltd (SEL)’s 3QFY19 revenue was in line with estimate (Rs 1.99bn, +8% YoY) while operating margin saw a dip of 17bps YoY/-241bps QoQ to 13.8% owing to 104bps contraction in gross margin. APAT stood at Rs 173mn (flat YoY). Engine volumes grew by 2.7% YoY to 22.569k units while tractor sales at the parent level (M&M) were at 90.72k units (+11% YoY). During 9MFY19, M&M’s tractor production grew by 9% YoY and sales grew 8.5%, inventory is at normal level.


Outlook


We cut our EPS estimate in the range of 4-7% over FY19-21E. Maintain BUY with a reduced TP of Rs 1828 (20x Dec-20E EPS).


For all recommendations report, click here


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First Published on Feb 7, 2019 03:18 pm
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