Hold Honeywell Automation, target price Rs 31,400: ICICI Securities

ICICI Securities has given a hold rating to Honeywell Automation with a target price of Rs 31,400. The share price moved down by 1.40 per cent from its previous close of Rs 32,201.50. The stock’s last traded price is Rs 31,750.

Honeywell Automation India Ltd., incorporated in the year 1984, is a Large Cap company (having a market cap of Rs 28271.79 Crore) operating in Engineering sector.

Financials
For the quarter ended 30-06-2020, the company reported a Standalone sales of Rs 736.23 Crore, up 4.54 % from last quarter Sales of Rs 704.26 Crore and down -14.10 % from last year same quarter Sales of Rs 857.03 Crore Company has reported net profit after tax of Rs 98.08 Crore in latest quarter.

Investment Rationale
The brokerage initiates coverage on HAIL with a HOLD rating despite rich valuation. It assigns an SoTP based target price of Rs31,400 implying a multiple of 60x FY22E earnings to the domestic business and 30x FY22E to the export business. It assumes the percentage contribution of exports in the earnings to be similar as in the revenues

Promoter/FII Holdings
Promoters held 75 per cent stake in the company as of June 30, 2020, while FIIs held 0.8 per cent, DIIs 13.8 and public and others 10.4 per cent.