Target: ₹1,484CMP: ₹1,303.30L G Balakrishnan Brothers (LGB) manufactures roller chains and undertakes metal forming, including warm & cold forging, fine blanking and machined parts. The stock currently trades at 15x FY24e EPS of ₹85.03 and 12.9x FY25e EPS of ₹98.90. In view of scarcely robust growth in the two-wheeler industry in the first half of current fiscal, we have trimmed down our current year earnings estimates by some 8 per cent. Earnings may gain momentum next fiscal though not without risk of mounting cost pressures. Balancing odds, we assign “accumulate” rating on the stock with revised target of ₹1,484 (previous target: ₹739) based on 15x FY25e earnings, over a period of 9-12 months.

Source: The Hindu December 13, 2023 03:14 UTC