Buy LG Balakrishnan & Bros, target price Rs 838: HDFC Securities

HDFC Securities has buy call on LG Balakrishnan & Bros with a target price of Rs 838. The current market price of LG Balakrishnan & Bros is Rs 724.55. Time period given by analyst is 9 months when LG Balakrishnan & Bros Ltd. price can reach defined target.

LG Balakrishnan & Bros Ltd., incorporated in the year 1956, is a Small Cap company (having a market cap of Rs 2291.80 Crore) operating in Auto Ancillaries sector.

LG Balakrishnan & Bros Ltd. key Products/Revenue Segments include Sale of Products, Scrap and Duty Drawback for the year ending 31-Mar-2021.



Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 524.42 Crore, down -6.72 % from last quarter Total Income of Rs 562.22 Crore and up 32.25 % from last year same quarter Total Income of Rs 396.53 Crore. Company reported net profit after tax of Rs 58.41 Crore in latest quarter.

Investment Rationale
The brokerage believes investors can buy the stock on dips in the band of Rs 675-685 (7.5x FY24E EPS) and add more on dips to Rs 607-617 band (6.75x FY24E EPS) for a base case fair value of Rs 770 (8.5x FY24E EPS) and bull case fair value of Rs 838 (9.25x FY24E EPS) over the next 2-3 quarters.

Promoter/FII Holdings
Promoters held 34.32 per cent stake in the company as of 30-Jun-2022, while FIIs owned 8.03 per cent, DIIs 11.82 per cent.