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India Equity Research Reports, IPO and Stock News
India Equity Research Reports, IPO and Stock News
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TP : Rs1,950
Investment Rationale
§ Focus on demand pull to ensure market share gains along with strong profitability. 1QFY12 market share of
~25% is still below its previous peak of ~32% in FY07
§ Expect strong volume growth of ~15.5% CAGR FY11-13E driven by launch of variants within its umbrella brands
(Discover, Pulsar), introduction of Boxer in domestic market and continued traction in exports
§ Factoring in DEPB withdrawal in our estimates. Extension of the scheme to result in EPS upgrade of ~7%.
Irrespective of DEPB, expect exports to remain a key growth driver
Valuations
§ We have valued the stock at a target PER of 17x our FY13 estimates.
§ Lowered our rating to ACCUMULATE from BUY on valuations. Here on there is limited scope of valuation
rerating.
§ Stock performance will be driven by earnings
§ Key trigger for the stock would be strong monthly volumes and quarterly earning surprises
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