Buy Steel Strips Wheels, target Rs 1,180: Axis Securities
Axis Securities has a buy call on Steel Strips Wheels with a target price of Rs 1,180.
The current market price of Steel Strips Wheels is Rs 1,053.
Time period given by the brokerage firm is 6-9 months when Steel Strips Wheels price can reach defined target.
"SSWL posted robust volume growth in wheels manufacturing in Q3FY18, recording an overall volume growth of 11 per cent Y-o-Y mainly due. Wheel volumes of all the segments grew; PV (up 4.7 per cent), 2&3 (up 18.5 per cent),CVs (up 34.4 per cent),Tractors (up 11.9 per cent) and OTR (up 16.7 per cent) on a Y-o-Y basis. The overall capacity utilizations in Q3 stood at 89 per cent, with Dappar plant operating at 91.3 per cent, Chennai at 79 per cent and Jamshedpur at 112 per cent capacity utilizations. Going forward, we expect good volume growth in heavier wheels primarily led by Commercial Vehicles due to macroeconomic recovery, huge uptick in demand from CV OEMs, rationalization on loading of trucks, demand from replacement market & increase in multi-axle trucks. We expect revenues to grow at 19 per cent CAGR and earnings to grow at 31 per cent CAGR over FY17-20E," Axis Securities said in a report.