2 SWARAJENG share price target reports by brokerages below. See what is analyst's view on SWARAJENG 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.
SEL has a healthy balance sheet with cash surplus of ~| 162 crore as of FY19. The company continues to be operationally efficient with a negative working capital cycle. It has consistently given high dividend payouts (~75%) and at CMP provides a healthy dividend yield of ~4.6%. Going ahead, however, accounting for tractor industry slowdown, the company’sbusiness is also expected to face headwinds. Accounting for the same, we have revised our estimates. We expect SEL to clock a 7.4% decline in sales volume in FY20E to 92,284 units (95,053 units in FY21E). Topline, EBITDA and PAT are expected to de-grow 2.2%, 1.5% and 5.5% CAGR, respectively, in FY19-21E. Thus, we downgrade our rating to REDUCE and value SEL at Rs 915 i.e. 15x P/E on FY21E EPS of Rs 60.8.
We expect a 10% CAGR in earnings over FY19-21 to Rs 998m. With the company’s lean cost structure and strong balance sheet, we value the stock at 26x FY21 (assigning lower multiple for lower growth) EPS of Rs 82.3 and arrive at a revised TP of Rs 2,139 (earlier Rs 2,312). We maintain a Buy Risk: Constrained volume growth in M&M tractors.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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