Last Updated : Oct 11, 2018 05:15 PM IST | Source:

Buy Timken India; target of Rs 675: JM Financial

JM Financial is bullish on Timken Indiahas recommended buy rating on the stock with a target price of Rs 675 in its research report dated October 09, 2018.

Broker Research @moneycontrolcom
  • bselive
  • nselive
Todays L/H

JM Financial's research report on Timken India

We resume coverage on Timken India (Timken) and publish our revised numbers to factor in the consolidation of ABC Bearings (ABC). In our view, the amalgamation of ABC Bearings would be EPS accretive from FY19 as net profit of the consolidated entity should increase 17% (factoring in 11-month consolidation in FY19) vs. 11% stake dilution through a share swap. Over FY18-21, we forecast sales and earnings CAGR of 16% and 25%, respectively, for the consolidated entity, led by a) strong growth in the domestic CV market (entry in wheel bearings segment), b) bounce-back in exports on easing of capacity constraints and favourable USD/INR movement and c) a production ramp-up at ABC as it is operating at sub-optimal capacity utilisation levels.


We maintain BUY with a Mar’20 TP of INR 675, as we lower our target multiple to 25x (30x) FY21E EPS due to increased competition in the railways segment, a sharp reduction in net exports in the past 3 years and amalgamation of a single-digit RoE business (ABC has low RoEs due to muted capacity utilisation).

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

First Published on Oct 11, 2018 05:15 pm
More From
Follow us on
Available On
PCI DSS Compliant