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India Equity Research Reports, IPO and Stock News
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Investment Rationale
§ We expect company to grow at above industry rate in FY12 due to its increasing focus on semi-urban/rural
market and ‘discover’ family.
§ We expect exports to be a strong growth driver over next three years (upwards of 15% CAGR) on volumes as
well as profitability due to the strategy of focusing on new markets and increasing market share in existing
markets.
§ Contrary to the perception, we believe that recent changes in product mix (higher share of Pulsar 135 cc and
Discover 100cc/150cc) will be margin remunerative.
Valuations
§ We have valued the stock at a target PER of 15.5x our FY12 estimates.
§ The key trigger in the stock will be positive surprise on three wheeler business.
§ While rising metal prices is a concern, given high EBITDA margin (20%) the impact of high metal prices will be
lowest in our auto universe.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Investment Rationale
§ We expect company to grow at above industry rate in FY12 due to its increasing focus on semi-urban/rural
market and ‘discover’ family.
§ We expect exports to be a strong growth driver over next three years (upwards of 15% CAGR) on volumes as
well as profitability due to the strategy of focusing on new markets and increasing market share in existing
markets.
§ Contrary to the perception, we believe that recent changes in product mix (higher share of Pulsar 135 cc and
Discover 100cc/150cc) will be margin remunerative.
Valuations
§ We have valued the stock at a target PER of 15.5x our FY12 estimates.
§ The key trigger in the stock will be positive surprise on three wheeler business.
§ While rising metal prices is a concern, given high EBITDA margin (20%) the impact of high metal prices will be
lowest in our auto universe.
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