Sharekhan has given Buy recommendation for Alicon Castalloy with a target price of Rs. 940 in its research report issued on Aug 16, 2022
Sharekhan’s research report on Alicon Castalloy
Alicon’s Q1FY23 results were below expectations, marred by 60bps higher-than-expected contraction in EBITDA margin at 10.8%, leading to EBITDA and PAT miss of 6.5% and 26.8% respectively. We remain positive on the company’s growth prospects, robust order book, multi-year order wins, increased share of high-margin machined components, and higher share of e-mobility business. The stock trades attractively at P/E multiple of 11.5x and EV/EBITDA multiple of 5.2x its FY2024E estimates.
Outlook
We maintain our Buy rating on Alicon Castalloy Limited (Alicon) with a revised PT of Rs940, factoring in long-term revenue visibility, given its robust strong order book.