ET BureauHDFC Securities has buy call on Rico Auto Industries with a target price of Rs 68.5. The current market price of Rico Auto Industries is Rs 58.9. Time period given by analyst is 6-9 months when its price can reach defined target.
Rico Auto Industries, incorporated in the year 1983, is a small cap company (having a market cap of Rs 796.15 Crore) operating in auto ancillaries sector.
Its key products/revenue segments include auto components, export incentives, other operating revenue, scrap and job work for the year ended March 31, 2021.
Financials
For the quarter ended June 30, 2022, the company has reported a consolidated total income of Rs 568.14 crore, up 9.59 per cent from last quarter total income of Rs 518.44 crore and up 41.62 per cent from last year same quarter total income of Rs 401.16 crore. Company has reported net profit after tax of Rs 8.47 crore in latest quarter.
The company’s top management includes Mr.Arvind Kapur, Mr.Arun Kapur, Mrs.Upasna Kapur, Mr.Kanwal Monga, Mr.Amarjit Chopra, Dr.Ashok Seth, Mr.Satish Sekhri, Mr.Rajeev Kapoor, Mr.Vinod Kumar Nagar, Mr.Arvind Kapur, Ms.Sarita Kapur, Mr.Arun Kapur, Mrs.Upasna Kapur, Mr.Kanwal Monga, Mr.Amarjit Chopra, Dr.Ashok Seth, Mr.Satish Sekhri, Mr.Rajeev Kapoor, Mr.Vinod Kumar Nagar, Ms.Sarita Kapur. Company has Walker Chandiok & Co. LLP as its auditors. As on June 30, 2022, the company has a total of 14 crore shares outstanding.
Investment Rationale
Going forward the visibility of revenues for Rico has improved and it is expected to benefit out of this along with margin expansion. Despite the recent increase in its stock price, the valuations remain undemanding.
The brokerage expects RICO’s Revenue/EBITDA/PAT to grow at 19/24/96%CAGR over FY22-FY24E, led by increased demand from end user industries.
They believe investors can buy the stock in Rs 55.5-57.5 band and add on dips to Rs 50-51 band (8.5x FY24E EPS) for a base case fair value of Rs 62.5 (10.5x FY24E EPS) and bull case fair value of Rs 68.5(11.5x FY24E EPS) over the next 2-3 quarters.
Promoter/FII Holdings
Promoters held 50.32 per cent stake in the company as of June 30, 2022, while FIIs owned 0.71 per cent, DIIs 0.96 per cent.
Rico Auto Industries, incorporated in the year 1983, is a small cap company (having a market cap of Rs 796.15 Crore) operating in auto ancillaries sector.
Its key products/revenue segments include auto components, export incentives, other operating revenue, scrap and job work for the year ended March 31, 2021.
Financials
For the quarter ended June 30, 2022, the company has reported a consolidated total income of Rs 568.14 crore, up 9.59 per cent from last quarter total income of Rs 518.44 crore and up 41.62 per cent from last year same quarter total income of Rs 401.16 crore. Company has reported net profit after tax of Rs 8.47 crore in latest quarter.
The company’s top management includes Mr.Arvind Kapur, Mr.Arun Kapur, Mrs.Upasna Kapur, Mr.Kanwal Monga, Mr.Amarjit Chopra, Dr.Ashok Seth, Mr.Satish Sekhri, Mr.Rajeev Kapoor, Mr.Vinod Kumar Nagar, Mr.Arvind Kapur, Ms.Sarita Kapur, Mr.Arun Kapur, Mrs.Upasna Kapur, Mr.Kanwal Monga, Mr.Amarjit Chopra, Dr.Ashok Seth, Mr.Satish Sekhri, Mr.Rajeev Kapoor, Mr.Vinod Kumar Nagar, Ms.Sarita Kapur. Company has Walker Chandiok & Co. LLP as its auditors. As on June 30, 2022, the company has a total of 14 crore shares outstanding.
Investment Rationale
Going forward the visibility of revenues for Rico has improved and it is expected to benefit out of this along with margin expansion. Despite the recent increase in its stock price, the valuations remain undemanding.
The brokerage expects RICO’s Revenue/EBITDA/PAT to grow at 19/24/96%CAGR over FY22-FY24E, led by increased demand from end user industries.
They believe investors can buy the stock in Rs 55.5-57.5 band and add on dips to Rs 50-51 band (8.5x FY24E EPS) for a base case fair value of Rs 62.5 (10.5x FY24E EPS) and bull case fair value of Rs 68.5(11.5x FY24E EPS) over the next 2-3 quarters.
Promoter/FII Holdings
Promoters held 50.32 per cent stake in the company as of June 30, 2022, while FIIs owned 0.71 per cent, DIIs 0.96 per cent.
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Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.
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