Buy Innovative Tyres & Tubes, target Rs 100: Rakesh Bansal

Rakesh Bansal of R K Global has a buy call on Innovative Tyres & Tubes with a target price of Rs 100.

The current market price of Innovative Tyres & Tubes is Rs 40.10.

Time-period given by the analyst is 18 months when Innovative Tyres & Tubes price can reach the defined target.


Investment rationale by Rakesh Bansal:
Innovative Tyres and Tubes Limited (ITTL) is one of the leading manufacturers and exporters of basic tyres in India, with prestigious experience of over 20 years in manufacturing field.

The Company is having a full range product along with tubes and flaps.

It has 2.2-to-400 kg per tyre range, covering lightest motorcycle tyre and one of the heaviest off-the road mining tyres that are produced under one roof.

The Company is one of the long-term job contract vendor for the multi-national tyre giant CEAT (for the past 21year).

The company has a diverse customer base and holds strong export market.

Recently, the company had a long-term manufacturing understanding for trucks, mining, agriculture and OTR tyres for Apollo International.

The revenue topline of the company in 2016-2017 was 13,253.77 lakhs and net profit of the company was 407.85 lakhs.

Currently the company exports tyres to more than 40 countries, spread across 5continents.

The company is fully equipped with complete testing facility for both tyres & tubes covering raw materials to final product.

The company is setting up its own state of an R & D centres required for the product.

ITTL has a middle strong industrial belt with good base infrastructure and access to all market areas.

The company is working closely with a leading international tyre manufacturer to supply them tyres for entire COMESA union of 17 countries, which can be a game changer.

At the current market price the company has a market capital of Rs 72 crore. It will be debt free by FY19. The stock trades at 9xFY19 which is 70 per cent discount to leaders.