Buy Escorts; target Rs 160: Kotak Securities

Written By Unknown on Sabtu, 14 Februari 2015 | 23.24

Kotak Securities is bullish on Escorts and has recommended buy rating on the stock with a target price of Rs 160, in its research report dated February 13, 2015.

Kotak Securities' report on Escorts

"Revenues at Rs.10464 mn declined by 10% YoY on the back of 17% fall in tractor volumes. Weak tractor demand lead higher discounting and negative operating leverage leading EBITDA margin declining over corresponding quarter previous year. However, sequentially EBITDA margins witnessed improvement. Company reported PAT of Rs357mn, better than our expectation on account of negative tax provisioning. Construction equipment and auto ancillary reported reduction in losses over 2QFY15. We expect the tractor demand to stay weak in the near term. Turnaround in loss making segment is expected to provide support to margins in the coming quarters. We retain BUY with revised price target of Rs 160 (earlier Rs163). Weak tractor demand in FY16 will be the key risk to our earnings estimates and target price", says Kotak Securities research report.

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To read the full report click here


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