Company background
Banco Products (I) Ltd (BPIL) is one of the leading auto ancillary companies. It manufactures sealing products (gaskets) and heat exchangers (radiators, intercoolers, oil coolers, etc). The company has strong client-base such as M&M, Maruti, Tata Motors, Indian Railways, Ashok Leyland, etc.
Result Highlights
Ø BPIL reported a 30% YoY increase in standalone operating income to INR 1,133mn in Q1FY11.
Ø Standalone EBITDA margin during the quarter increased 20bps to 25.4% however, net margin declined 160bps to 16.9%.
Ø BPIL has recently made an acquisition (NRF) which has good brand name for its product range of marine heat exchangers and oil coolers in Europe.
Valuation
At the CMP of INR 107, the stock trades at a PE multiple of 7x as per our FY11 earnings estimate. We expect BPIL is available at very attractive price considering its strong client base and the acquisition of NRF. Assigning the target PE multiple of 9.4x for FY11, the stock offers the target price of INR 145 with potential upside of 35% from current level. We recommend our investors to Buy this stock for 12 months investment horizon.
2 comments:
Another bank another potential blowup.
Hi,
Very nice info about Banco Products we offer 365 days plan and zero brokerage freedom plan with unlimited trading.
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