Sharekhan has given Buy recommendation for Greaves Cotton with a target price of Rs. 178 in its research report issued on Oct 26, 2021

Sharekhan’s research report on Greaves Cotton

Greaves reported a weak performance in Q2FY22, led by lower-than expected sales and poor operational performance. Management remains positive on its diversification strategy and expects to normalize its sales and profitability. Greaves is expected to clock a 23% revenue CAGR during FY2021-23E also see a sharp rise in margins, leading to a 231% earnings CAGR. The stock trades below historical averages at a P/E multiple of 17.7x and EV/EBITDA multiple of 10.3x its FY2023E estimates.

Outlook

We maintain a Buy on the stock Greaves Cotton Limited (Greaves) with a revised PT of Rs. 178, led by strengthening position in e-mobility and non-auto businesses.

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