2 STERTOOLS share price target reports by brokerages below. See what is analyst's view on STERTOOLS 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 expect recovery in growth from 2HFY21, supported by expected improvement in economic scenario and low base. Due to sharp decline in MHCV sales, continued double-digit decline in two wheeler sales and delay in expected recovery in other segments, we cut our FY20/FY21 estimates for the company. We rate the stock as SELL (unchanged) with revised target price of Rs155 (earlier Rs152). We value the stock at a PE of 14x on FY22E earnings (earlier valued at 14x on FY21E earnings).
Automobile demand in 1QFY20 declined more than expected. Weak demandtrend continued in 2QFY20 with OEM’s reporting sharp decline in sales in July 2019. Demand is likely to remain weak in 2QFY20 as well. For the auto industry, FY20 is expected to be tough year. Accordingly, STL’s performance is expectedto be weak. We expect improved demand and low base to support growth in FY21. Given sharp fall in automobile production and challenging near term outlook, we cut our FY20/FY21 estimates. We rate the stock as ADD with revised target price of Rs175 (earlier Rs238). We value the stock at PE of 14x on FY21E earnings.
Operating margin should recover on a sequential basis aided by decline in RM prices. We rollover valuations to FY21E earnings. With recent correction of nearly 10% in the last few days, we do not expect significant downside from these levels. Bigger risk here will be the delay in revenue growth recovery and that will be the key to watch over next 2 quarters. We had a BUY rating earlier but downgrade to Accumulate considering the revenue growth challenges and limited expansion in margins. Recommend Accumulate with a target rice of Rs 369.
STL supplies fasteners to all the automobile segments. While the current auto demand sentiments remain subdued, we expect gradual improvement. Further, there are expectations of pre-buying of vehicles ahead of BSVI implementation. Commodity prices impact is likely to continue in 4QFY19 and the recent correction in commodity prices are expected to have impact from 1QFY20 onwards. We rate the stock as ADD with revised target price of Rs307 (earlier Rs361).
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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