Bajaj Electricals (BEL) has posted strong growth in 3QFY12. This stock research report by Angel Broking recommends to buy stocks of Bajaj Electricals.
Bajaj Electricals (BEL) posted strong top-line growth of 15.1% yoy to Rs.794cr (Rs.690cr) in 3QFY2012. The company’s OPM fell by 212bp yoy but improved by 66bp qoq to 8.2%. PAT for the quarter came in at Rs.33cr (Rs.41cr), down 19.1%
yoy.
Stock Valuations:
The trend of strong top-line growth is expected to continue going ahead as well. Further, company’s margin is expected to improve from these levels on the back of easing commodity prices and closure of lower-margin E&P projects. Overall, it is expected that the company will post a top-line CAGR of 15.7% over FY2011–13E. Stock analysts's expect adjusted PAT to register a CAGR of 18.5% to Rs.183cr over FY2011–13E. With the recent sharp correction, the stock is available at attractive valuation on just 9.3x FY2013 earnings, against its five-year historical average of 11x one-year forward earnings. It is recommended to Buy stocks of Bajaj Electricals for target price of Rs.201, valuing the stock at 11x FY2013 earnings.
