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S p a n i s h t i e - u p t o im p r o v e r a i lw a y r e v e n u e s …
Farm equipment and engineering goods manufacturer Escorts,
announced that it has signed an exclusive agreement with Spanish firm
“Ingeteam Traction” to provide traction systems to Indian Railways.
Ingeteam Traction designs and supplies complete traction, control and
auxiliary systems for trams, EMUs, locomotives and high-speed trains.
The agreement with Ingeteam enables Escorts to foray in the niche
domain of rail traction systems. Ingeteam is a market leader specializing
in electrical engineering and serves key sectors like rail traction, marine.
Railway segment to provide additional revenue streams
The Indian railways inline with its vision 2020 has sought technological
upgradation in various traction systems. Escorts will initially supply
traction control converter and locomotive control converter with design
and manufacturing of internal traction systems for rolling stock. The
product has large-scale application on electric locomotives, diesel-electric
locomotives, diesel electrical multiple units (DEMU) and electric multiple
units of Indian Railways. The traction systems can also be used on metro
rail coaches. The tie-up with Escorts marks the foray of Ingeteam into
India, to be a part of the large scale expansion plans of the Indian
railways, providing open and first technological level solutions.
Pick up in tractor volumes
Escorts sold 63,870 units in SY11 recording a modest 6.3% YoY growth.
Volumes for Q4SY11 advanced to 15,266 (up 7.4% QoQ) which could
have been bettered if not for the company’s limited presence in the
robust southern & western regions. Competitors like M&M, John Deere
and TAFE have higher penetration in these areas. However, in the
coming fiscals we expect the company to improve performance in these
geographies aided by flexible priority sector lending rates.
V a l u a t i o n
We have factored market share pressures emanating from increasing
competition and slow operational turnaround. The stock is trading at | 80,
4.8x SY13E EPS. We have valued it on an SOTP basis with a target price
of | 91. We are giving a BUY rating on the stock with a 14% upside
potential. We suggest investors who entered at higher levels to hold the
stock, recommend waiting for Q4SY11E results to make fresh entry
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S p a n i s h t i e - u p t o im p r o v e r a i lw a y r e v e n u e s …
Farm equipment and engineering goods manufacturer Escorts,
announced that it has signed an exclusive agreement with Spanish firm
“Ingeteam Traction” to provide traction systems to Indian Railways.
Ingeteam Traction designs and supplies complete traction, control and
auxiliary systems for trams, EMUs, locomotives and high-speed trains.
The agreement with Ingeteam enables Escorts to foray in the niche
domain of rail traction systems. Ingeteam is a market leader specializing
in electrical engineering and serves key sectors like rail traction, marine.
Railway segment to provide additional revenue streams
The Indian railways inline with its vision 2020 has sought technological
upgradation in various traction systems. Escorts will initially supply
traction control converter and locomotive control converter with design
and manufacturing of internal traction systems for rolling stock. The
product has large-scale application on electric locomotives, diesel-electric
locomotives, diesel electrical multiple units (DEMU) and electric multiple
units of Indian Railways. The traction systems can also be used on metro
rail coaches. The tie-up with Escorts marks the foray of Ingeteam into
India, to be a part of the large scale expansion plans of the Indian
railways, providing open and first technological level solutions.
Pick up in tractor volumes
Escorts sold 63,870 units in SY11 recording a modest 6.3% YoY growth.
Volumes for Q4SY11 advanced to 15,266 (up 7.4% QoQ) which could
have been bettered if not for the company’s limited presence in the
robust southern & western regions. Competitors like M&M, John Deere
and TAFE have higher penetration in these areas. However, in the
coming fiscals we expect the company to improve performance in these
geographies aided by flexible priority sector lending rates.
V a l u a t i o n
We have factored market share pressures emanating from increasing
competition and slow operational turnaround. The stock is trading at | 80,
4.8x SY13E EPS. We have valued it on an SOTP basis with a target price
of | 91. We are giving a BUY rating on the stock with a 14% upside
potential. We suggest investors who entered at higher levels to hold the
stock, recommend waiting for Q4SY11E results to make fresh entry
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