January 27, 2017 / 13:26 IST
Total acreages in the last Kharif season 2016 were at 106.8 million hectares, up 4% YoY. Consequent food grain production, however, is expected to be robust primarily due to good spatial distribution of rainfall across India. According to the first advance estimate released by the Ministry of Agriculture, total food grain production is expected at a record 135 million tonne (MT), up 9% YoY.
Outlook
We expect SEL to clock engine sales volume CAGR of 12.8% in FY16-19E to 91925 units in FY19E (64088 units in FY16). We expect sales and PAT to grow at a CAGR of 13.0% and 16.2%, respectively, in FY16-19E. We have valued SEL at Rs 1565 i.e. 25x P/E on FY18E & FY19E average EPS of Rs 62.5. We assign a BUY rating to the stock.
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