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Hold Swaraj Engines; target of Rs 1720: ICICI Direct

ICICI Direct recommended hold rating on Swaraj Engines with a target price of Rs 1720 in its research report dated January 27, 2022.

February 28, 2022 / 02:53 PM IST
 
 
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ICICI Direct's research report on Swaraj Engines


Swaraj Engines (SEL) is involved in manufacturing diesel engines for M&M’s Swaraj brand of tractors. It is headquartered at Mohali (Punjab). Steady ~13% compounding of revenues, EBITDA, PAT over past five years • Net cash positive b/s; consistent cash flow generation; highly capital efficient player with history of >30% return ratios & high dividend payouts.


Outlook


We downgrade the stock from BUY to HOLD amid muted growth expectations in the tractor space on high base of FY21. Introducing FY24E, we now value SEL at Rs 1,720 i.e. 15x P/E on FY23-24E average EPS of ~Rs115/share (earlier target price Rs 2,135).

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At 17:30 Swaraj Engines was quoting at Rs 1,450.90, down Rs 69.30, or 4.56 percent.

It has touched an intraday high of Rs 1,523.60 and an intraday low of Rs 1,450.00.

It was trading with volumes of 6,227 shares, compared to its thirty day average of 1,210 shares, an increase of 414.49 percent.

In the previous trading session, the share closed down 6.34 percent or Rs 102.85 at Rs 1,520.20.

The share touched its 52-week high Rs 1,989.90 and 52-week low Rs 1,254.95 on 29 June, 2021 and 24 February, 2021, respectively.

Currently, it is trading 26.88 percent below its 52-week high and 15.94 percent above its 52-week low.

Market capitalisation stands at Rs 1,761.77 crore.

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first published: Jan 29, 2022 08:38 pm
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