Kotak Securities maintains buy on Talbros Automotive Components, target Rs 177

Kotak Securities has maintained buy rating on Talbros Automotive Components in the long term with a target price of Rs 177. The stock ended up 1.1% at Rs 107.35 on Monday while the BSE Sensex closed 141.33 down at 37,531.98. The equity and money markets were closed on Tuesday on account of Dusshera festival.

Company Financials

For the quarter ended 30-06-2019, the company has reported consolidated sales of Rs 107.48 crore, up 1.17 % from last quarter sales of Rs 106.24 crore and down -12.74% from last year same quarter sales of Rs 123.18 crore. The company has reported net profit after tax of Rs 2.63 crore in the latest quarter.


Investment Rationale

In FY20, the brokerage expects the company’s performance to be weak amid significant slowdown in automobile demand. From April-August 2019, two wheeler, passenger vehicle and commercial vehicle YoY production is down by 11%, 16%, and 23% respectively, said Kotak Securities. Currently the stock is trading at a PE of 6.6 times on FY20 estimated earnings and 4.7 times on FY21 estimated earnings.