ICICI Direct is bullish on Munjal Showa recommended buy rating on the stock with a target price of Rs 130 in its research report dated July 13, 2020.
ICICI Direct's research report on Munjal Showa
Munjal Showa (MSL) is a leading shock absorber (including front forks, struts) manufacturer domestically with a significant market share in the oligopolistic industry. It can be seen as a proxy play on volume & demand recovery at Hero MotoCorp (HMCL), with HMCL accounting for ~80% of its total sales (FY20). Part of the Hero Group (Munjal family), MSL was established in 1985 in technical collaboration with Showa Corporation (Japan), which also holds a 26% stake in the company.
Outlook
We expect base case valuations to prevail at MSL and assign BUY rating, valuing the stock at Rs 130 i.e. 4x EV/EBITDA with implied P/B at 0.8x FY20 numbers.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More