Sharda Motor Industries
OUTLOOK & VALUATION
SMIL is a leading auto-ancillary company supplying exhaust and suspension systems to major OEMs. The company is well placed to be benefited from implementation of BS VI emission norms which rolled out from April 01, 2020. Further, the JV with Eberspaecher for production of exhaust systems for commercial vehicles is likely to drive the business. This debt-free company holds substantial cash; has healthy return ratios & strong growth prospects. Going forward, we expect company to witness value driven growth and rise in profitability on account of contributions from JV; we expect SMIL to deliver an EPS of Rs.155.9 in FY23; assigning a target multiple of 12x we arrive at a target price of Rs.1,871 showcasing an upside potential of 78.6% with an investment horizon of 18-24 months.
Buy Sharda Motor Industries Ltd CMP 1048 TGT 1871
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