TRF acquires balance 49% stake in DLTML; Emkay

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TRF

Reco: HOLD

CMP: Rs 209

Target Price: Rs 282

TRF acquires balance 49% stake in DLTML;

·      TRF acquires balance 49% stake in Dutch Lanka Trailers for a consideration of USD 8.33 mn w.e.f. 30 Dec’11. TRF to benefit from the above acquisition in the long run

·      Auto business to drive earnings growth for TRF during FY11-13E period. Upsides to earnings exist from penetration in domestic market and stability in operational performance

·      Revise our FY13E earnings down by -4% to Rs27.6 per share to factor higher interest costs from increased DER

·      Risks to earnings from MHE business offset upsides from Auto components business. Retain Hold rating with TP Rs282