CEBBCO - Spreading wings - Emkay

- Key beneficiary of uptick in truck volumes and rising shift towards fully built solutions (FBS) vis-a-vis sale in 'chassis form'. Key strengths lie in fabrication and motion technology.

- Traditionally a proxy to tipper segment. Efforts to de-risk visible (non-tipper FBS revenues at ~41% in FY12E). FBS penetration at ~20% indicates huge opportunity size.

- Approval for railway authority for new wagon manufacturing facility (funded through IPO proceeds in Oct 2010) to provide impetus to de-risking without compromising on key strengths.

- Initiate with a BUY, expect FY13E/14E EPS of Rs 10/12.3 (FY12-14E CAGR of 27%). At TP of Rs 90, stock trades at FY13E/FY14E PER of 9x/7.3x PER and EV/EVIDTA of 6.5x/5.1x.

Source : Equity Bulls

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