Buy Timken India, target price Rs 2700: JM Financial

JM Financial has buy call on Timken India with a target price of Rs 2700. The current market price of Timken India is Rs 2393.65. Time period given by analyst is one year when Timken India Ltd. price can reach defined target.

Timken India Ltd., incorporated in the year 1996, is a Mid Cap company (having a market cap of Rs 17826.84 Crore) operating in Engineering sector.

Timken India Ltd. key Products/Revenue Segments include Bearing Accessories & Maintenance Products, Sale of services, Export Incentives for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Standalone Total Income of Rs 672.30 Crore, up 31.10 % from last quarter Total Income of Rs 512.80 Crore and up 39.13 % from last year same quarter Total Income of Rs 483.22 Crore. Company reported net profit after tax of Rs 121.30 Crore in latest quarter.

Investment Rationale
Valuations remains a tad expensive at 34x FY24 vs 5-year median of 35x and 10-year median of 33x. However, a better EPS growth profile of 25% CAGR over FY22-24E (vs 17% CAGR in past 5/10 years) and superior RoE of 22-23% vs 16% in past 10 years is likely to drive re-rating in the stock.

Promoter/FII Holdings
Promoters held 67.8 per cent stake in the company as of 31-Mar-2022, while FIIs owned 2.9 per cent, DIIs 13.0 per cent.