Sharekhan has given Buy recommendation for Alicon Castalloy with a target price of Rs. 1111 in its research report issued on Sep 26, 2022
Sharekhan’s research report on Alicon Castalloy
FY2022 annual report highlights on its timely investments in developing new products for carbon-neutral technology and focus on technology agnostics components, making it future ready for changing trend in the automobile sector. We remain positive on the company’s growth prospects, led by robust order book, multi-year order wins, increased share of high-margin machined components, and higher share of the e-mobility business. Earnings to report a robust 118% CAGR during FY2022-FY2024E, led by a 27% revenue CAGR and a 300-bps improvement in EBITDA margin. The stock trades attractively at P/E multiple of 12.7x and EV/EBITDA multiple of 5.7x its FY2024E estimates.
Outlook
We maintain our Buy rating on Alicon Castalloy Limited (Alicon) with a revised PT of Rs. 1,111, led by rolling forward target multiple to September 2024E EPS.