Buy' Swaraj Engines; target at Rs 749: Microsec

[Rajesh Desai]

 

Dear Sir/Madam,

 

'Buy' Swaraj Engines; target at Rs 749: Microsec - Myiris

 

http://www.myiris.com/newsCentre/storyShow.php?fileR=20140218173628043&dir=2014/02/18

Commenting on the investment rationale, the stock broker said, 'The Company’s revenue during the quarter surged by 20.80% YoY, but was flat QoQ at Rs 1.49 billion. On YoY basis, the revenue expanded on account of 21.2% growth in engines volume; realizations remaining flat at Rs 80,502/unit. On QoQ basis, the overall flat performance was due to uniform volume growth and marginal fall in realizations. The capacity utilization for the quarter was 99%; the same recorded last quarter.

At the CMP of Rs 625, the stock is trading at P/E of 11.44x its FY14e EPS of Rs 54.63, P/E of 11.1x its FY15e EPS of Rs 56.78 and P/E of 8.34x its FY16e EPS of 74.93. Given such strong earnings, incremental production, leading supplier to M&M, we expect the company to outperform in future. We have assigned a P/E multiple of 10x on FY2016e EPS of Rs 74.93 a share and arrived at a target price of Rs 749 a share for the company i.e. an upside of 20%.'

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Microsec Capital has recommended 'Buy' on Swaraj Engines (SEL) with target price of Rs 749 as against current price of Rs 625 in its report.

 

 

Regards,

 

Team Microsec Research

 

 

 

Microsec Capital Limited

Tel: 91 33 30512100

Fax: 91 33 30512020

 

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CA. Rajesh Desai