INSUBCONTINENT EXCLUSIVE:
Antique Stock Broking has a buy call on Kirloskar Pneumatic Company with a target price of Rs 1,175.
The current market price of Kirloskar
Pneumatic Company is Rs 880.
Time period given by the brokerage is one year when Kirloskar Pneumatic Company price can reach the defined
View of the brokerage on the company:Kirloskar Pneumatic Company (KPC) is one of the strongest brands with a well-established products
basket and proven capabilities
The company has a lion's share in the refrigeration compressor market and is looking to tap the larger oil-flooded rotary screw compressor
market through new products
Incremental investment in the oil gas sector (with specific focus on increasing gas consumption) is expected to drive demand for KPC
Further, the government's thrust on cold storage, road construction, and exports is expected to aid the company's revenue growth
We expect 23% earnings CAGR along with improving return ratios over FY18-20E
Thus, we initiate coverage on KPC with a BUY and target price of INR 1,175, based on 20x FY20E earnings.
