Sharekhan has given Buy recommendation for Greaves Cotton with a target price of Rs. 196 in its research report issued on Aug 12, 2022
Sharekhan’s research report on Greaves Cotton
Greaves continues to grow its businesses strongly in Q1FY23. E-mobility business continues to be EBIT positive at 3.6% in Q1FY23, showing a 60bpd q-o-q improvement. The management remains positive on its diversification strategy and continues to focus on the e-mobility space. Greaves is expected to clock a 21.2% revenue CAGR during FY2021-FY2024E and see a sharp rise in margins, leading to an earnings CAGR of 108.2%. The stock trades at a P/E multiple of 28.1x and EV/EBITDA multiple of 14.2x its FY2024E estimates.
We maintain Buy on Greaves Cotton Limited (Greaves) with an unchanged PT of Rs.196, owing to a robust business outlook for its mobility business, expanding retail business and improving traction in the engine business.