Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Research

| More

BUY NRB Bearings - Margin expansion in Q1 leads to robust profitability: AnandRathi Institutional Reserach

Posted On: 2016-08-18 20:05:29

NRB Bearings - Margin expansion in Q1 leads to robust profitability; Buy with a target price of Rs 140.

Off-take for bearings in both OEM and aftermarket has supported NRB's overall revenue growth. Also, with healthy margins, profit grew 33.9% yoy in Q1. Its increasing export focus would drive future growth. We maintain our Buy recommendation.

Upturn in overall demand boost revenue growth. NRB Bearings' Q1 FY17 revenue climbed 9.6% yoy to Rs. 1.74bn, in line with our expectation. Mounting demand has resulted in helping the company come up with decent growth. Exports in Q1 grew.

230-bp yoy expansion in operating profit margin. The Q1 operating profit margin expanded 230bps yoy to 16.8% on account of healthy fixed-cost absorption. Other expenses declined 166bps yoy to 16.3%. In future, with the ramping up of exports, the company expects the margin to improve.

Favourable margin powers bottom-line growth. NRB's Q1 FY17 PAT grew 33.9% yoy to Rs. 141m on account of the higher margins and a slight increase in other income, by 19.5% yoy, to Rs. 13.5m. The tax rate was flattish during the quarter. With rising exports and margins, profitability is expected to rise.

Ahead. With growth expected in exports, we anticipate revenue to register a 13% CAGR over FY16-18. The revival in the auto sector would boost overall demand, hence expanding margins. Also, with the healthy uptick in OEM and aftermarket, profitability is expected to register a 34% CAGR over FY16-18.

Valuation. With the turnaround in auto-sector demand and NRB's increasing focus on exports, its prospects are brighter. We maintain our Buy call, and assign a PE of 17x to FY18e earnings, deriving a price target of Rs. 140. The stock trades at 17.6x FY17e and 13.8x FY18e. Risks: Keener competition, higher input costs, currency fluctuation.

Shares of NRB BEARINGS LTD. was last trading in BSE at Rs.118 as compared to the previous close of Rs. 115.9. The total number of shares traded during the day was 12650 in over 257 trades.

The stock hit an intraday high of Rs. 122.5 and intraday low of 116.75. The net turnover during the day was Rs. 1522136.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Ajanta Pharma - Initiating Coverage - Arihant Capital Markets
Result Update: Indo Count Industries Ltd - BUY - TP Rs.135 - Kotak
Arihant Capital Markets - Ambuja Cement 4QCY17 Result Update - HOLD
Result Update: Bodal Chemicals Ltd - ACCUMULATE - TP Rs.164 - Kotak
Result Update: Mahindra & Mahindra - BUY - TP Rs.864 - Kotak
Result Update: The India Cements Ltd - BUY - TP Rs.195 - Kotak
Result Update: Sun TV Network Ltd - REDUCE - TP Rs.994 - Kotak
Result Update: Voltas Ltd - ACCUMULATE - TP Rs.648 - Kotak
Result Update: Oil India Ltd - ACCUMULATE - TP Rs.392 - Kotak
Result Update: Petronet LNG Ltd - BUY - TP Rs.285 - Kotak
Result Update: Carborundum Universal Ltd - BUY - TP Rs.418 - Kotak
Proposed opening of coal sector to private players: Angel Broking
Result Update: Vascon Engineers Ltd (VEL) - BUY - TP Rs.57 - Kotak
Initiating Coverage: HSIL Ltd - Angel Broking
Result Update: The Phoenix Mills Ltd - BUY - TP Rs.672 - Kotak
Result Update: Time Technoplast Ltd - BUY - TP Rs.214 - Kotak
Result Update: Shipping Corporation of India - BUY - TP Rs.110 - Kotak
Result Update: PNC Infratech Ltd - BUY - TP Rs.208 - Kotak
Result Update: KNR Constructions Ltd - ACCUMULATE - TP Rs.348 - Kotak
Result Update: NBCC (India) Ltd - ACCUMULATE - TP Rs.229 - Kotak
Result Update: Jindal Stainless Hisar Ltd - BUY - TP Rs.318 - Kotak
Result Update: NMDC Ltd - SELL - TP Rs.130 - Kotak
Result Update: Talbros Automotive Ltd - BUY - TP Rs.389 - Kotak
Result Update: Sterling Tools Ltd - ACCUMULATE - TP Rs.428 - Kotak
Result Update: FIEM Industries Ltd - BUY - TP Rs.1203 - Kotak
Management Meet Update: Escorts Ltd - BUY - TP Rs.1051 - Kotak
Result Update: GE Shipping Company - BUY - TP Rs.500 - Kotak
Result Update: Marico Ltd - ACCUMULATE - TP Rs.327 - Kotak
Result Update: Mahanagar Gas Ltd - ACCUMULATE - TP Rs.1084 - Kotak
Result Update: Wonderla Holidays Ltd - BUY - TP Rs.457 - Kotak
Result Update: Asian Granito India Ltd - BUY - TP Rs.705 - Kotak
Result Update: NALCO - BUY - TP Rs.100 - Kotak
Result Update: VA Tech Wabag Ltd - BUY - TP Rs.672 - Kotak
Result Update: Greaves Cotton Ltd - REDUCE - TP Rs.136 - Kotak
PNB's 11300 cr fraud will impact the asset quality: Angel Broking
Lambodhara Textiles Ltd Q3 net profit climbs to Rs. 3.46 crores
Result Update: GHCL Ltd - BUY - TP Rs.365 - Kotak
CHHOTA (to) Mota Ideas - Result Update: Eveready Industries India Ltd - BUY - TP Rs.530 - Kotak
Result Update: Tata Motors - BUY - TP Rs.477 - Kotak
Result Update: Bajaj Auto Ltd - BUY - TP Rs.3670 - Kotak
Views on Indoco Remedies Ltd 3QFY2018: Angel Broking
Government finally lays out a detailed roadmap for PSU banks: Angel Broking
Idea Cellular feels the pressure of Jio pricing in Q3: Angel Broking
Company Update: GHCL - BUY - TP Rs.365 - Kotak
Result Update: Zee Entertainment Exterprises Ltd - REDUCE - TP Rs.610 - Kotak
Result Update: Hindustan Unilever Ltd - ACCUMULATE - TP Rs.1520 - Kotak
Result Update: TV18 Broadcast Ltd - ACCUMULATE - TP Rs.67 - Kotak
Views on Wipro Limited 3QFY2018: Angel Broking
Yes Bank reports better than expected quarterly results: Angel Broking
Result Update: DB Corp Ltd - BUY - TP Rs.550 - Kotak


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2018