Escorts Outlook: The shares of Escorts included in Jhunjhunwala’s portfolio have weakened today after the results. Experts have mixed opinions about investing in this. Big Bull raised stake last quarter.
Escorts Outlook: Today (February 9), a day after the announcement of the December 2021 quarter results, the prices of Escorts are showing weakness. This stock is also included in the portfolio of veteran investor Rakesh Jhunjhunwala. Talking about the quarterly results, the net profit of Escorts declined by 28 per cent year-on-year in December 2021. Most of the analysts are bearish on this stock in the near term and believe that it may see further downside.
So far this year, its prices have fallen by 3 per cent and today it is down 0.36 per cent at Rs 1,834 per share. Big Bull Jhunjhunwala had increased his stake in this company in the last quarter. Jhunjhunwala held 4.8 per cent stake in the company in the July-September 2021 quarter, which increased to 5.2 per cent in the next quarter October-December 2021.
APY: Rs 5000 pension arranged by saving Rs 7 daily, 71 lakh subscribers associated with this government scheme in FY22 so far
Kotak Securities: Reduced
Fair Value: Rs 1,800
According to brokerage firm Kotak Securities, Escorts’ results remained in line with estimates, but analysts have estimated its EPS (earnings per share) to be 3-11 per cent lower in tractor sales in the domestic market and 10 bps (0.10 per cent) in EBITDA. ) is cut. Kotak Securities, however, believes that the tractor industry can grow at a CAGR of 5 per cent (Compound Annual Growth Rate) by the financial year 2023-24 and the escorts business can grow due to the recovery of the economy. Despite this, Kotak Securities has downgraded the rating of this stock and reduced the target price from Rs 1900 to Rs 1800. Analysts believe that this stock is fully priced.
Motilal Oswal: Neutral
Target Price: Rs 1,800
Analysts at Motilal Oswal have lowered the target price for investing in Escorts. Analysts have cut EPS (earnings per share) by 10 per cent for FY 2022 and 7.5 per cent for FY 2023 due to lower tractor sales. According to the brokerage firm, Escorts’ results are reasonable considering the high-cost inflation and operating leverage. Demand may remain weak in the near term but the company’s management has predicted recovery in FY2023 on the back of stable agro-economic factors. Analysts have fixed a target price of Rs 1800 for investing in this.
Nirmal Bang: Accumulate
Target Price: Rs 1,790
Analysts at brokerage firm Nirmal Bang are cautious about the tractor industry and expect sales to fall by 2 per cent in FY2023 and 2 per cent in FY2024. Escort’s 80 per cent revenue comes from tractor business while 90 per cent EBIT comes from this business. Analysts have lowered the company’s earnings estimates by 6-8 per cent for the fiscal year 2022-2024. Analysts have reduced the target price for investing in it from Rs 1830 to Rs 1790.
Reliance Securities: Buy
Target Price: Rs 2,250
Tractor sales may be weak in the near term, yet Reliance Securities believes that the tractor industry will grow due to changing industry dynamics, increasing mechanization, increasing purchasing power and increasing use of tractors in many ways. Analysts have given it a buy rating due to its superior position in the tractor segment, strong positive cash flow, healthy return ratio and attractive valuations. Reliance Securities has fixed a target price of Rs 2250 for investing in it.
(Article: Kshitij Bhargava)
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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