Edelweiss is bullish on Vesuvius India has recommended buy rating on the stock with a target price of Rs 1392 in its research report dated June 21, 2017.
Edelweiss' research report on Vesuvius India
Q1CY17 sales catapulted 27.6% YoY (outperforming industry) on account of steel production in large mills jumping 15%. The bigger driver was exports, which sustained CY16 momentum—it had jumped 77% YoY and contributed 20% to sales. While deemed exports grew 17% YoY on account of demand stabilising at Arcelor Mittal in Kazakhstan, direct exports to parent surged 3.2x YoY to INR 853mn (54% of exports).
We expect VIL to post revenue and earnings CAGR of 16% and 21%, respectively, over CY16-18E. We maintain ‘BUY’ with target price of INR 1,392. The stock is currently trading at 23.6x CY17E and 19.5x CY18E EPS.
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