Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    

| More

Stock Picks - Hero MotoCorp, Ultratech Cement - Arihant Capital Markets

Posted On: 2017-09-28 20:39:22

Hero Motocorp (Cmp - Rs. 3788 Tgt - Rs. 3990)

Hero MotoCorp is the World's single largest two-wheeler motorcycle company. Hero became the first company in the country to introduce four-stroke motorcycles and set the standards for fuel efficiency, pollution control and quality. They have an excellent distribution and service network spread throughout the country.

Hero Motocorp is poised for high single-digit volume growth in FY18.Pick-up in rural demand and new product launches are expected to support sales ahead. Further, the company has taken price hikes in the range of Rs 500-2,200/ vehicle which will offset the increase in input costs due to commodity price escalation. The company will launch six new products and has envisaged a capex of Rs25 bn for the next two years. Both urban and rural segments witnessed positive growth in 1QFY18. There was no inventory destocking by dealers in 1QFY18.

We estimate Hero MotoCorp's revenue growth of 12.5% in FY18E and 13% in FY19E, expect EBITDA margins to be around 16% for FY18E and FY19E, expect PAT growth of 9.1% in FY18E and 13.7% in FY19E . The stock at Rs 3,788 trades at 18 x our estimated FY19E EPS of Rs 210 per share. We assign a price target of Rs 3990 at 19x FY19 EPS, and have "HOLD" rating on the stock.

Ultratech Cement (Cmp - Rs.3915, Tgt - Rs.4453)

Ultratech Cement Ltd is engaged in the manufacture and marketing of Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland Pozzalana Cement. They also manufacture ready mix concrete (RMC). The company is also the country's largest exporter of cement clinker. Company has a total of 12 grey cement manufacturing plants spread across Rajasthan , Andhra Pradesh, Maharashtra, Gujarat, Chhattisgarh, Karnataka, Tamil Nadu & Madhya Pradesh. White Cement is manufactured at Rajasthan plant.

UltraTech Cement's recently-acquired 17.2 MT of Jaiprakash Associates' (JPA's) cement assets. JP Associates current capacity utilisation is 40% and company expects it to rise till 75% within 24 months of acquisition. This acquisition will help in consumption and pricing control over PET Coke. Synergies expected from the acquisition would stem from logistics rationalisation, brand leveraging, management bandwidth and efficiencies in process management. Company expects the acquisition to cash breakeven in one year and be EPS accretive by 2 years Out of 21.1 MTPA assets, 17.1 MTPA are operating at 42% CU and 4 MTPA capacity is under construction; the management estimates CU at 60%/75% for FY18/19E.

We stay Positive on the stock as this acquisition will give company major market share with production capacity of 91 MT from existing 70MT. We have valued the stock using EV/EBITDA(x) and have ascribed EV/EBITDA multiple of 19(x) to its FY19E estimates & arrived at fair value of Rs. 4,453 per share.

Source: Equity Bulls

Click here to send ur comments or to

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., 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. 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:

Company Update: Venky's India Ltd - ACCUMULATE - TP Rs.4600 - Kotak
Company Update: NBCC (India) Ltd - BUY - TP Rs.229 - Kotak
Company Update: Petronet LNG Ltd - BUY - TP Rs.276 - Kotak
India Inc. has INR 1.8 lakh crore of cash trapped in their balance sheets: EY Report
Company Update: KNR Constructions Ltd - BUY - TP Rs.348 - Kotak
Akzo Nobel India Ltd - Initiating Coverage - Kotak Securities
Greenply Industries - Initiating Coverage - Angel Broking
Growth of India's apparel exports contingent upon overcoming internal and external headwinds: ICRA
Management Meet Update: Kansai Nerolac Paints Ltd - BUY - TP Rs.600 - Kotak
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

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

disclaimer copyright © 2005 - 2018