Hold Rico Auto Industries; target of Rs 70: Sharekhan
Sharekhan recommended Hold rating on Rico Auto Industries with a target price of Rs 70 in its research report dated May 30, 2019
June 03, 2019 / 04:44 PM IST
Sharekhan's research report on Rico Auto Industries
Q4 results were significantly below estimates as increasing commodity costs, pricing power from OEM’s and operating deleverage impacted the margins. Earnings growth would be meager 2% in FY20 as slowdown in domestic OEM, pricing pressures and rising inetrest and depreciation to weigh on earnings. Return ratios are unlikely to improve and we expect ROE to remain in 10-11% range which rules out any scope of multiple re rating.
We retain Hold rating on the stock of Rico Auto Industries (RAI) with a revised PT of Rs 70.
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