Suven is currently trading at a 1 year forward P/E of 16x. Considering the improving operational efficiency we foresee stable EBITDA margin to remain higher and forecast PAT to grow at 17% each for both FY20 and FY21. We upgrade the rating to ‘Buy’ from ‘Hold’ on a multiple of 18x with a revised target price of Rs 303.
We forecast sales and PAT to grow at a CAGR of 12% and 11% resp. (FY19-21E) and increase revenue estimate by ~4%&5% resp. for FY20/21. Considering the low momentum in sales & PAT growth we downgrade the rating to ‘Hold’ from‘Buy’ on a multiple of 20x with a revised target price of Rs291.