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Hold Swaraj Engines, target Rs 1040: Centrum Broking

The current valuations are already factoring in a large part of the estimated growth and consequently there is limited upside in near to medium term.

ET Now|
Updated: Jul 29, 2016, 01.52 PM IST
Centrum Broking has a hold call on Swaraj Engines Ltd. with a target price of Rs 1040. The current market price of Swaraj Engines Ltd. is Rs 1168.65. Time period given by analyst is year, when Swaraj Engines Ltd. price can reach defined target. The brokerage cited the fact that the current valuations are already factoring in a large part of the estimated growth from its being one of the key beneficiaries of recovery in tractor volumes and consequently sees limited upside in near to medium term. The company reported strong Q1 FY17 results on the back of strong volume growth. The Q1 FY17 EBITDA improved by 27.5 per cent and PAT improved by 21.4 per cent YoY. "While we continue to like Swaraj as a pure play on domestic tractor industry with strong balance sheet, we believe the current stock prices largely factor in nearto medium-term upside". It is trading at 20.8x FY17 and 16.9x FY18 estimated EPS.

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Disclaimer: This recommendation is analyst's own and does not represent those of & Please consult your financial advisor before taking any position in the stock/s mentioned.

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