ICICI Direct recommended hold rating on JK Tyres and Industries with a target price of Rs 150 in its research report dated May 23, 2018.
ICICI Direct's research report on JK Tyres and Industries
On a consolidated basis, Q4FY18 revenues came in at | 2,284 crore (up 6.1% YoY), below our estimate of | 2,362 crore. Revenue from India (adjusting excise duty) increased ~10% YoY to | 2,239 crore (accounting for ~88% of consolidated revenue) while revenue from Mexican operation declined 12% YoY to | 296 crore. Revenue from Cavendish Industries (CIL) was at ~| 453 crore
Outlook
Further, we await clarity on fund raising plans (via debt or equity as the former will result in higher interest outgo while the later will dilute earnings). Thus, we value JKTIL at 5x FY20E EV/EBITDA with a target price of | 150 and a HOLD recommendation.
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