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Eastern Financiers
TIL (Buy)
CMP: ₹382
Target: ₹510
TIL (formerly Tractors India Ltd) is one of the leading providers of a wide range of construction equipment for India’s infrastructure sector. The company manufactures various materials handling equipment and distributes an array of infrastructure equipment used in construction, mining and power industry.
TIL is the market leader in mobile cranes in the MHS segment with a market share of 81 per cent as of FY14. Despite challenging macroeconomic environment, it has been able to retain the leadership position.
The company has put in efforts to reduce huge inventories and to meet its debt obligations. This will improve earnings and strengthen its balance sheet.
The company will benefit from the Government’s thrust on infrastructure development coupled with $-1 trillion investment planned in favourable sectors. We believe TIL’s technical expertise in MHS business, association with CAT as a distributor, and growth potential will drive the company’s earnings and margin growth.
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