Anand Rathi is bullish on Kirloskar Brothers has recommended buy rating on the stock with a target price of Rs 392 in its research report dated October 29, 2018.
Anand Rathi's research report on Kirloskar Brothers
Kirloskar Brothers? standalone sales growth in Q2 was modest. In H2 FY19 strong growth is expected in its subsidiaries, especially SPP Pumps and Rodelta, and order inflows are expected at a healthy pace due to higher crude oil prices in CY19. Margins would improve because of a favourable sales mix. The oil & gas sector, industry and ?smart? building orders are expected to assure consistent growth in the next five years. We maintain our Buy rating, and target of `392, at 12x FY20e EV/EBITDA.
Outlook
Lower provisioning would lead to greater profitability in the next two years. A pick-up in subsidiary performances would lead to strong earnings growth. We maintain a Buy.
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