Fundamentals

Ticker: 530367 BUY: Rs.169
Target: Rs.190

The company is engaged in manufacturing of ball and roller bearings. It has presence in domestic and international markets. In FY18, the revenue from exports increased by 20 per cent YoY due to huge order line-up from North America in the heavy truck segment, along with growing demand from ASEAN region and Iran. Its total revenue for Q4FY18 was up by 25 per cent driven by strong growth in OEMs. The EBITDA margin improved from 13.2 per cent to 17.9 per cent on a YoY basis. Also, the PAT margin too jumped from 6.2 per cent to 11.4 per cent in Q4FY18. The two-wheelers and commercial vehicles would drive the topline of the company. For capacity expansion, it has set aside capex of Rs 650 crore for FY19. Considering the capacity expansion, growth in exports and robust financials, we recommend it as a BUY.

Ticker: 530239 BUY: Rs.203
Target: Rs.230

It is a bio-pharmaceutical company having two segments, namely CRAMS and DDDSS. For the quarter ending March 2018, the CRAMS segment contributed 59 per cent to the revenue as against 35 per cent in Q4FY17. It grew by 101 per cent YoY, driven by commercialisation of one molecule from phase three. During the quarter, the company received five product patents covering India, Canada, Australia, Europe and other countries. In FY18, a total of 113 projects were on the active mode. The specialty chemicals segment contributed 35 per cent to Q4FY18 revenue and grew by 39 per cent YoY. Over the next 18 months, the company has planned capex of Rs 1.5 bn. For FY19, management expects core CRAMs revenue to grow by 10-15 per cent . The EBITDA margin would be above 30 per cent . Thus, we recommend it as a BUY.