The shares of the leading maker of Open Type Ammonia Refrigeration Compressors rose 3 percent to Rs 681.60 after Ambit Capital suggested a ‘buy’ recommendation with a 38 percent upside potential based on Friday’s closing price of Rs 660.50.
On Tuesday, Kirloskar Pneumatic Company Ltd shares were trading at Rs 617.40, up Rs 10.90 or 1.65 percent from the previous close.
The company’s revenue declined by 11 percent year on year, rising from Rs 272 crore in Q1FY23 to Rs 242 crore in Q1FY24. During the same time period, net profit rose by 12 percent, from Rs 16 crore to Rs 18 crore.
Based on a positive outlook on Kirloskar Pneumatic Company Ltd, Ambit Capital recommended its target price of Rs 912 a share representing a 38% increase from Friday’s closing price of Rs 660.50 a share.
The rationale behind providing such a recommendation is
● According to Ambit Capital, Kirloskar Pneumatic is making investments in refrigeration and gas compressors/packages, which are benefiting from tailwinds in these key categories as build-out of CNG infrastructure gains pace.
● According to Ambit, Kirloskar Pneumatic is introducing new products to meet gaps and benefits from cost leadership due to in-house foundry manufacturing. engineering, and design as opposed to assembled products by MNC counterparts.
● Despite a higher growth potential, Kirloskar Pneumatic remains one of the cheapest companies in the industrial sector. In the long run, analysts expect it to replicate Elgi Equipment’s performance by adding 6-8 new products, increasing market share in air compressors through cost leadership, and reaching an export mix of 15-20 percent by FY30E.
Kirloskar Pneumatic Company Ltd is engaged in the business of Compression & Transmission segments. The company also undertakes O&M services for Compression Packages and has also entered logistic services by operating RoadRailer trains for end-to-end transportation of goods.
Written by Omkar Chitnis
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
