Recommendations from Engineering - Heavy & Auto Sectors

Recommendations from Engineering - Heavy & Auto Sectors

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.
Sanghvi Movers Ltd.

CMP - Rs 219.80
BSE CODE : 530073
Volume : 1,25,948
Face Value : Rs 2
Target : Rs 245
Stoploss : Rs 198 (CLS)


Sanghvi Movers Ltd (SML) is strong play on the India’s infra play. SML enjoys market leadership position and owns a large fleet of equipment. SML has a diverse and balanced fleet mix to cater to the different sectors. SML has a long-standing relationship with the crane manufacturers and has a robust and diversified order book across the sectors. With strong cash flows SML has a clear debt reduction plan in place. SML has a legacy of three decades as a leading Heavy Lifting Solution company headquartered in Pune. SML is the largest Crane rental company in Pune and is the fifth largest in the world. The company has a total fleet of 377 cranes out of which 252 are second hand as per the annual reports. Over the past three years the company has delivered a CAGR profit growth of over 14 percent. SML has recently reduced debt and with the increased government spend on infra projects SML can be expected to improve its profitability, hence it is a BUY.

Endurance Technology Ltd.

CMP - Rs 1,816.30
BSE CODE : 540153
Volume : 1,731
Face Value : Rs 10
Target : Rs 2,050
Stoploss : Rs 1,650 (CLS)


One of India’s largest auto-components companies, Endurance Technologies is an end-to-end solutions provider for aluminum die-casting, suspension, braking systems and transmission products. Some of the strengths of Endurance Technologies are – debt free company and B2C presence through aftermarkets., operational efficiencies and flexible cost structures. Enhanced product mix is one of the core strengths for the company and allows itself to grow consistently. The backward integration strategy is working well for the company and it enjoys an AA+ credit rating by CRISIL. The total income has grown at a CAGR of 4 percent from 2017-21 while EBITDA has grown with a CAGR of 8 per cent. The PAT CAGR has been 12 per cent in the similar period. Endurance Technology is one of the major beneficiaries of the resurgence of the automobile industry in India and can be expected to benefit from the emerging EV market in India. We recommend a BUY in Endurance Technology.

(Closing price as of Oct 29, 2021) 

 

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