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Accumulate Amara Raja Batteries; target of Rs 892: Geojit

Sagar Shirsat
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Buy Trent, target Rs 355: Shailendra Kumar

Trent's strong balance sheet, strong business positioning and stores expansion plan make it attractive for long term investment. Target of Rs 355 implies 4x EV/Sales on FY20, says Shailendra Kumar of Narnolia Financial Advisors.

Geojit's research report on Amara Raja Batteries

Amara Raja Batteries Ltd (ARBL) is India’s second largest Lead-acid battery manufacturer. Its segment includes automotive and industrial lead acid batteries, with market leadership in Telecom segment.Q3FY18 revenue grew by 16.9%YoY which was largely driven by automotive segment but industrial segment remained subdued. EBITDA margin improved by 20bpsYoY due to price hikes taken for increase in RM cost and effective cost strategies.

Outlook

We lower our FY19 PAT estimate by 3% respectively to factor higher tax and expect earnings growth at 13% CAGR over FY17-20E. We believe normalization of business in industrial segment and maintain our valuation at 22xFY20E EPS with a revised target price of Rs892 with Accumulate rating.

For all recommendations report, click here

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09-03-2018-04