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    Buy Asahi India Glass, target price Rs 553: ICICI Securities

    Synopsis

    Asahi India Glass Ltd., incorporated in the year 1984, is a Mid Cap company (having a market cap of Rs 10603.58 Crore) operating in Glass sector.

    buyGetty Images
    Promoters held 54.24 per cent stake in the company as of 31-Mar-2022, while FIIs owned 1.47 per cent, DIIs 1.55 per cent.
    ICICI Securities has buy call on Asahi India Glass with a target price of Rs 553. The current market price of Asahi India Glass Ltd. is Rs 447.7. Time period given by analyst is one year when Asahi India Glass Ltd. price can reach defined target.
    Asahi India Glass Ltd., incorporated in the year 1984, is a Mid Cap company (having a market cap of Rs 10603.58 Crore) operating in Glass sector.

    Asahi India Glass Ltd. key Products/Revenue Segments include Glass Materials, Other Operating Revenue, Sale of services for the year ending 31-Mar-2021.


    Financials
    For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 832.72 Crore, up 4.06 % from last quarter Total Income of Rs 800.23 Crore and up 10.28 % from last year same quarter Total Income of Rs 755.07 Crore. Company reported net profit after tax of Rs 96.64 Crore in latest quarter.

    Investment Rationale
    Asahi India Glass’ (Asahi) Q4FY22 EBITDA margin came in at 26.4% (down marginally by 23bps QoQ) despite 620bps QoQ decline in gross margin. The margin performance was driven by 13% QoQ growth in architectural segment along with 16% QoQ automotive segment growth. Power & fuel costs fell 350bps sequentially cushioning the margin as Asahi was able to use lower-priced power contracts till Q4-end, along with superior operating leverage also helped Asahi reduce staff costs by 150bps QoQ. Architectural segment reported an all-time high EBIT margin of 34.7% (up 120bps QoQ), which we believe may not sustain going ahead due to increase in power and fuel costs from Q1FY23. THe brokerage continues to be positive on Asahi for the following reasons: i) it is a strong proxy play for domestic PV recovery (~72% market share) coupled with rising content per vehicle; ii) it is a play on architectural segment rise led by revival of real estate demand; iii) entry into the more capital-efficient solar glass segment. However, higher energy prices, progress on new capex and operations on the solar glass front remain key monitorables. It has marginally cut FY24E earnings by 2.7% due to 115bps reduction in EBITDA margin as a result of elevated power and fuel costs. It maintains BUY on the stock with an unchanged DCF-based target price of Rs553, implying 23x FY24E EPS.

    Promoter/FII Holdings
    Promoters held 54.24 per cent stake in the company as of 31-Mar-2022, while FIIs owned 1.47 per cent, DIIs 1.55 per cent.



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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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