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CIMB Securities upgrades Timken India to add, raised target price to Rs 980

An increase in margins in Q2 was driven by a better product mix, localisation of supply chain and price hikes.

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Last Updated: Dec 03, 2019, 08.25 AM IST|Original: Dec 03, 2019, 08.01 AM IST
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CIMB Securities has upgraded Timken India to add from hold in the long term and raised target price to Rs 980 from Rs 750. Shares of Timken India ended up 3.4% at Rs 886.60 on Monday while the BSE Sensex closed 8.36 points up at 40,802.17.

Company Financials

For the quarter ended 30-09-2019, the company has reported standalone sales of Rs 401.17 crore, down -8.36% from last quarter sales of Rs 437.75 crore and down -3.06 % from last year same quarter sales of Rs 413.84 crore. The company has reported net profit after tax of Rs 49.80 crore in the latest quarter.

The company’s top management includes Mr.Ajay K Das, Mr.Avishrant Keshava, Mr.Bushen Lal Raina, Mr.P S Dasgupta, Mr.Sanjay Koul, Mrs.N S Rama. Company has Deloitte Haskins & Sells LLP as its auditors. As on 30-06-2019, the company has a total of 75,218,734 shares outstanding.

Investment Rationale

An increase in margins in the second quarter was driven by a better product mix, localisation of supply chain and price hikes, which are likely to sustain, said CIMB Securities. Th e brokerage said its substantial EPS upgrades over FY20-22 are due to a structural uptick in margins and lower tax rate.

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