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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
RECO : ACCUMULATE TP : Rs1,950
Investment Rationale
§ Focus on demand pull to ensure market share gains along with strong profitability. 2QFY12 domestic market
share of ~27% 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 lower export incentives of ~5% in FY13. New duty drawback scheme (~5.5%) and ~1% higher
incentive in FMS (total ~3%) to lead to higher benefits. Expect exports to remain a key growth driver
§ Favorable forex movement to lead to improved earnings visibility (Re 1 change in USD/INR to result in ~1.2%
EPS change). We have factored in USD/INR at Rs 45.2 in FY13
Valuations
§ We have valued the stock at a target PER of 17x our FY13 estimates.
§ Stock performance will be driven by earnings
§ Key trigger for the stock would be strong monthly volumes and quarterly earning surprises
Click for full list and other company details below
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
RECO : ACCUMULATE TP : Rs1,950
Investment Rationale
§ Focus on demand pull to ensure market share gains along with strong profitability. 2QFY12 domestic market
share of ~27% 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 lower export incentives of ~5% in FY13. New duty drawback scheme (~5.5%) and ~1% higher
incentive in FMS (total ~3%) to lead to higher benefits. Expect exports to remain a key growth driver
§ Favorable forex movement to lead to improved earnings visibility (Re 1 change in USD/INR to result in ~1.2%
EPS change). We have factored in USD/INR at Rs 45.2 in FY13
Valuations
§ We have valued the stock at a target PER of 17x our FY13 estimates.
§ Stock performance will be driven by earnings
§ Key trigger for the stock would be strong monthly volumes and quarterly earning surprises
Click for full list and other company details below
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