Buy Greaves Cotton, target price Rs 183: Sharekhan by BNP Paribas

Sharekhan by BNP Paribas has buy call on Greaves Cotton with a target price of Rs 183. The current market price of Greaves Cotton is Rs 133.35.

Greaves Cotton, incorporated in the year 1922, is a Mid Cap company (having a market cap of Rs 3071.68 Crore) operating in Engineering sector.

Greaves Cotton key Products/Revenue Segments include Engines, Service Income, Other Operating Revenue and Export Incentives for the year ending 31-Mar-2022.

Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 713.83 Crore, up 6.43 % from last quarter Total Income of Rs 670.73 Crore and up 88.02 % from last year same quarter Total Income of Rs 379.65 Crore. Company has reported net profit after tax of Rs 33.54 Crore in latest quarter.

The company’s top management includes Mr.Karan Thapar, Mr.Nagesh Basavanhalli, Dr.Arup Basu, Mr.Arvind Kumar Singhal, Mr.Kewal Handa, Ms.Sree Patel, Mr.Vinay Sanghi, Mr.Firdose Vandrevala, Mr.Ravi Kirpalani. Company has Deloitte Haskins & Sells LLP as its auditors. As on 30-09-2022, the company has a total of 23 Crore shares outstanding.

Investment Rationale
The brokerage is bullish on the counter owing to a robust business outlook for its mobility business, expanding retail business, and improving traction in the engine business. The management continued to focus on e-mobility business and have lined up three launches shortly. Further, the management expects its diversification strategy to result in robust sales growth and an improvement in the margin profile. The stock trades at a P/E multiple of 21.2x and EV/EBITDA multiple of 9.1x its FY2024E estimates.

Promoter/FII Holdings
Promoters held 55.54 per cent stake in the company as of 30-Sep-2022, while FIIs owned 3.63 per cent, DIIs 7.68 per cent.