Target: ₹4,620
CMP: ₹4,035.30
The company is currently trading at 48x of FY23 eps and 39x of FY24 eps. In Q2-FY23, the consolidated revenue grew 99 per cent to ₹1,567 crore.
Company has shown strong financial performance along with robust order book of ₹4,008 crore. Company’s strategy to grow overseas businesses, expanding non-coal India markets and defense continues to boost its performances.
Exports and overseas business has outperformed by showing a growth of 107 per cent year-on year. Defense business has achieved another milestone by crossing ₹100 crore in this quarter.
Therefore, company after establishing in Indian ammunition market, is looking forward for export opportunities that are providing a new avenue of growth and company is first private sector company in India to receive order for exports. This in turn lead the management to revise its annual revenue growth for FY23 from 30 per cent to around 50 per cent
Hence, we recommend Buy on stock with price target of ₹4620 in medium term.
Increase in Input cost and Increase in competitive intensity are key risks.