Given these headwinds, we revise our rating from BUY to Accumulate on the stock. For FY20, revenue estimates are revised downwards by 1.8%. Inspite of fall in tax rate from 35% to 25.2% we expect profit estimates to remain nearly the same as it will be set off by fall in EBITDA by 11.7%. For FY21E, we have lowered volumes/ revenues / EBITDA/PAT by 18.7%/6.1%/20.5%/7.8%.
Margins have normalized after three weak quarters which were impacted by forex and inventory losses. The worse seems to be behind but as the stock appears oversold there is limited downside from current levels. At the CMP, stock trades at 12.9x FY20E and 10.0x FY21E earnings estimates. We maintain long term BUY rating and target price of Rs 97.
The worse seems to be behind but the stock appears oversold and hence there is limited downside from current levels. At the CMP, it trades at 18.0x FY20E and 13.4x FY21E earnings estimates. We maintain our long term BUY rating with a revised target price of Rs 97 (17x March 21E EPS) with an upside of 27%.