Sharekhan is bullish on Greaves Cotton has recommended buy rating on the stock with a target price of Rs 178 in its research report dated October 26, 2021.
Broker Research
October 27, 2021 / 04:33 PM IST
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.
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Sharekhan’s research report on Greaves Cotton
Greaves reported a weak performance in Q2FY22, led by lower-than expected sales and poor operational performance. Management remains positive on its diversification strategy and expects to normalize its sales and profitability. Greaves is expected to clock a 23% revenue CAGR during FY2021-23E also see a sharp rise in margins, leading to a 231% earnings CAGR. The stock trades below historical averages at a P/E multiple of 17.7x and EV/EBITDA multiple of 10.3x its FY2023E estimates.
Outlook
We maintain a Buy on the stock Greaves Cotton Limited (Greaves) with a revised PT of Rs. 178, led by strengthening position in e-mobility and non-auto businesses.
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