4 BAJAJELEC share price target reports by brokerages below. See what is analyst's view on BAJAJELEC share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
BEL is now trading at 66.3x and 18.9x on FY21E/FY22E earnings basis, respectively. We had been a tad cautious on the company in view of weak balance sheet and misallocation of capital into the EPC business. The company had elevated levels of debt relative to peers and also its EPC business had been bleeding and generating sub-optimal return on capital employed. However, the company has done well in FY20 in terms of generating cash flow and raised equity to bring debt to comfortable level. Hence, we now accord higher EV/EBITDA multiple of 16x (earlier 10x) to the company’s consumer business. As a result, our target price based on SOTP stands revised to Rs 447 (Rs 285 earlier). In view of the modest upside, we maintain “ADD” rating on the stock.
We have revised earnings for BEL and now expect EPS of Rs 0.9 (Rs 2.2 earlier) and Rs 11.6 (Rs 12.7 earlier) for FY20E and FY21E respectively. We have also forecasted FY22E numbers. BEL is now trading at 31.7x/19.1x in FY21E/FY22E on earnings basis & at 15.5x/11.3x in FY21E/FY22E on EV/EBITDA basis. In view of the improved earnings outlook in the near term, we change our stance to positive on the stock. We expect earnings to rise sharply in FY21E to factor saving in interest costs due to reduction in debt. We arrive at a SOTP based revised target price of Rs 468 (Rs 332 earlier). In view of the moderate upside, we recommend “ADD”.
We remain skeptical about the debt reduction plans and margin recovery based on which we retain our “HOLD” rating valuing the company at 21x on FY21 EPS for a target price of Rs. 355 representing an upside potential 11%.
We have revised earnings for BEL and now expect EPS of Rs 2.2 (Rs 12.5 earlier) and Rs 12.7 (Rs 14.6 earlier) for FY20E and FY21E respectively. BEL is trading at 25.9x on FY21E basis. In view of the weak earnings outlook in the near term and premium valuations, we maintain our negative outlook on the stock. We have sharply reduced our FY20 earnings estimate to factor in margin pressure in T&D business and impact of interest costs. We arrive at a SOTP based revised target price of Rs 332 (Rs 388 earlier); In our previous update, we had recommended “Reduce” rating on the stock. Though the stock price has corrected sharply but it is yet to show meaningful improvement in performance to review our stance. Hence, maintain “REDUCE”.
Though we are positive on BEL’s CD business (with revenue CAGR of ~19% in FY19-21E) led by expansion in dealer network, lumpiness of EPC business would dent overall profitability of BEL with high debt level. We believe the poor performance of the EPC business and higher interest cost would overshadow the profitability of CD business. On an SOTP basis, we cut our multiples owing to flattish growth for the company and value BEL’s CDsegment at MCap of 1.1x FY21E sales (~55% discount to peers) and E&P segment at 4x FY21E EV/EBITDA. We revise our rating downward from HOLD to REDUCE with a target price of | 320/share.
We expect the durable segment to post a growth of 20-25% on the back of strong volume pick up from Tier II and Tier III cities. We maintain our revenue estimates but tone down the margins as impacted by EPC segment UP orders which wouldpartially be offset by marginal increase in consumer segment margins. We revisedown the rating to “HOLD” and value the company at 24x for FY21E and arrive at a target price of Rs. 589 giving an upside of 8%.
We tweak our FY20 earnings estimate downwards to factor in margin pressure in T&D business. We arrive at a SOTP based revised target price of Rs 530 (Rs 550 earlier); move recommendation to ‘SELL’ from ‘ACCUMULATE’ earlier on company’s stock.
We expect BJE to post 21% adjusted earnings CAGR over FY19-FY21E led by margin expansion and a favorable revenue mix. The SOTP-based target price of Rs605 is based on a P/E of 30x FY21E EPS to consumer product segment (15% discount to peers) and 10x to E&P segment.
We still maintain BAEL valuation discount vis-à-vis the peer group due to 1/ lower margin/return ratios and 2/ company’s presence in capital intensive E&P business. We maintain SOTP based target price of Rs 550. Due to limited upside to our target price we move rating to ‘ADD’ (from BUY earlier) on company’s stock.
We expect the durable segment to post a growth of 20-25% on the back of strong volume pick up from Tier II and Tier III cities. Also the EPC segment to contribute 50% of total revenues and significantly degrow in the coming years due to absence of UP projects. We value the company at 22x for FY20 and arrive at a target price of Rs. 540 giving an upside of 26%.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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