Buy Elgi Equipments, target price Rs 140: ICICI Direct

ICICI Direct has given a buy rating to Elgi Equipments with a target price of Rs 140. The share price moved up by 1.06 per cent from its previous close of Rs 126.90. The stock’s last traded price is Rs 128.25.

Elgi Equipments Ltd., incorporated in the year 1960, is a Mid Cap company (having a market cap of Rs 4054.85 Crore) operating in Electric/Electronics sector.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 480.27 Crore, up 67.85 % from last quarter Sales of Rs 286.13 Crore and up 7.99 % from last year same quarter Sales of Rs 444.74 Crore Company reported net profit after tax of Rs 32.26 Crore in latest quarter.


Investment Rationale
Going forward, the brokerage expects revenue, EBITDA growth of 7.9%, 37%, CAGR, respectively, in FY20-22E. It values the company at Rs 140 (32x FY22 EPS of Rs 4.4) with a BUY rating on the stock.

Promoter/FII Holdings
Promoters held 52 per cent stake in the company as of June 30, 2020, while FIIs held 18.2 per cent, DIIs 15.6 per cent and public and others 14.2 per cent.