Minda Industries Ltd Buy for 25 return

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Pee Vee
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Minda Industries Ltd Buy for 25 return

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Minda Industries Ltd

Reco Price (Rs) 325, Previous Target (Rs) 423, Return Achieved 30%, New Target (Rs) 550, Expected Return 25%

We had recommended a BUY on Minda Industries with a target of Rs430 in our Strategy Report Top Picks 2017 released on January 09, 2017. The target was surpassed in the previous trading session, thus yielding a return of 30% in less than two months. We continue to be positive on the stock as we see multiple triggers for revenue growth. While organic growth will be driven by scale up of business from existing customers and new facilities, inorganic growth would continue led by consolidation of group companies. Considering strong earnings CAGR of 40% during FY16-19E, healthy balance sheet and strong return ratios, we find the valuations attractive at FY19E P/E of 11.4x. We advise investors to hold the stock for further upsides. In Q3 FY17 result update released on February 13, 2017, we had extended our target to Rs472. We further raise our target to Rs550.

IIFL
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