Sharekhan recommended hold rating on Greaves Cotton with a target price of Rs 155 in its research report dated May 02, 2019.
Sharekhan's research report on Greaves Cotton
GCL’s 3w segment volumes to remain flat in the FY2020 while stringent norms for electric scooters and weak rural sentiments to impact agri segment in near term. We expect margin pressures to sustain due to huge cost increase on account of BS6 norms; expect OPM to drop in FY21; earnings to be flat over next two years. We have cut FY2020 and FY2021 estimates by 6% and 7%. Upcoming buyback programme would support company’s stock price in the near term.
We retain our Hold rating on Greaves Cotton Limited with an unchanged PT of Rs 155. Q4 earnings were below estimates as lower than expected operating performance impacted profits.
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