Sushil Finance's report on TIL
Slower pick-up in material handling division coupled with subdued demand in road-construction equipment biz led to flattish topline which declined marginally by 2% YoY to Rs.615 mn. Operating profit declined by 6% YoY to Rs.63 mn with margins slightly lower by 40 bps to 10.2%. Interest cost came down drastically from Rs.102 mn in Q3FY16 to Rs.37 mn in Q3FY17 mainly on debt reduction resulting in Company reporting net profit of Rs.1mn compared to a loss of Rs.53mn in Q3FY16.
Outlook
Higher focus on infrastructure development along with gradual revival in economy is likely to auger well for the Company going forward. Improving utilizations along with deleveraged balance-sheet would help improve margins. At the CMP of Rs.292, the stock is trading at 38x & 12x its FY18E & FY19E EPS of Rs.7.6 & Rs.23.8 respectively. Hence considering the growth prospects, we recommend our investors to Accumulate the stock in the range of Rs.270-300 with a target price of Rs.360.
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