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ICICI Securities
3M India (Add)
Target: ₹20,000
CMP: ₹18,534.50
3M USA’s supplier of multiple products used in mobile handsets and with an expected increase in the production of handsets in India (under PLI scheme), 3M India will be a major beneficiary. Global players such as Samsung and some contract manufactures of Apple have also been given approvals under the PLI scheme.
3M India is likely to benefit considering parent’s relations with these global players. 3M India can manufacture some products required by handset manufacturers in India and/or can import from its group companies which will earn it trading margin.
We model 3M India to eventually set up new units to manufacture mobile components in India. There will be higher demand for industrial consumables too sold by 3M India such as sanitizers, safety markers, face masks and hand gloves.
We remain positive on 3M India due to moats like strong brands, established distribution network and access to technology pool of parent.
We maintain Add and a DCF-based target price of ₹20,000 (55x FY23 expected).
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