According to the brokerage, big changes are taking place within the company including a CEO change as well as changes in its operating environment following agri reforms. The CEO Designate laid out a clear path to address underlying issues and create value through (a) tough actions on loss-making subsidiaries, (b) tightening of capital norms, (c) differentiation of the core SUV positioning, and (d) the realization of nine businesses’ potential identified as billion-dollar candidates.
Motilal Oswal’s Jun’22E-based SOTP TP is Rs 600/share – an upside of almost 20 per cent. At this target price, the implied core P/E is 13.9 times versus 5-year average core P/E of ~15.9 times and 10-year average of 14.3 times.
For the quarter ended March 31, 2020, the company reported consolidated sales of Rs 3,101 crore, up 1.80 per cent from last quarter sales of Rs 3046.10 crore and up 7.67 per cent from last year’s same quarter sales of Rs 2880.05 crore. The company reported net profit after tax of Rs 230.67 crore in the latest quarter.
Promoters held 51.18 per cent stake in the company as of March 31, 2020, while FIIs held 23.94 per cent, DIIs 15.56 and public and others 9.32 per cent.