2 SSWL share price target reports by brokerages below. See what is analyst's view on SSWL 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.
We have revised our FY21 estimates (as presented below) sharply downwards and expect a recovery in FY22 as post-COVID world emerges and things come back to normalcy. We turn SELLERS on the stock as near term pressures could lead to a loss as recent capacity expansion in FY17-19 will lead to high interest burden. We value SSWL at 12X FY22E EPS of Rs 27.2 and arrive at a target price of Rs 327, an 18% decline from CMP
While CV volumes remain a concern, we like its alloy wheel traction with strong committed orders from Hyundai and Kia motors. Exports again grew by 50% YoY with nearly 6L wheels being exported (16% of overall volume). Despite uncertainty till H1FY21, we see good value in the stock at these levels and expect strong growth coming from alloy wheels and exports resulting in higher EBITDA margins and contributing to nearly 30% (up from <10% in FY19) to revenue in FY22E. We introduce FY22 estimates, cut FY20E and 21E EPS and value SSWL at 13x FY22E EPS with a price target of Rs 850 (13% upside). This stock is poised to be re-rated and a staggered BUY is recommended.
SSWL is hedging its decline in domestic volume by aggressively increasing exports and expects to nearly double the exports volume to 30 lac wheel rims in FY20, from 16 lac wheel rims in FY19. It has also started supplying much awaited alloy wheels to variousOEM’s including Tata Motors, Hyundai, Ford, Nissan and M&M (nominated). Average blend realizations improved this quarter to Rs. 1187 from Rs 1159 in FY19 on back of sales increase in premium car segment, exports and alloy wheels. We are apprehensive about domestic demand environment but confident that export revenues, alloy wheel clientele and festive season revival will help in mitigating the downsides partly. We reiterate BUY rating in the stock but with revised FY21 estimates on account of domestic environment & expect revenues to grow at 7% CAGR and earnings to grow at 19% CAGR over FY19-21E. We value SSWL at 14x FY21E with a price target of Rs 1047 (34% Upside).
Major growth triggers for the company going forward are the brown-field CV expansion in Chennai and green-field alloy wheel plant in Mehsana, Gujarat. Both being high margin segments, are expected to improve the average blended realizations of the company and thus the return ratios. We introduce FY19 estimates & expect revenues to grow at 10% CAGR and earnings to grow at 25% CAGR over FY19-21E. We value SSWL at 15x FY21E given the growth prospects to arrive at a price target of Rs 1240 (57% Upside).
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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