Buy Bosch; target of Rs 19,795: Sharekhan
Sharekhan is bullish on Bosch has recommended buy rating on the stock with a target price of Rs 19,795 in its research report dated August 03, 2022.
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.
Sharekhan's research report on Bosch
The stock trades below its historical average at a P/E of 26.2x and EV/EBITDA of 17.8x its FY24E estimates. Bosch’s Q1FY23 results were broadly in-line with expectations. Revenue, EBITDA and PAT continue to perform well in Q1, growing at 45.1% y-o-y, 44.8% y-o-y and 28.4% y-o-y respectively. Support from the parent company and investment in R&D would be key drivers to tap emerging opportunities in EVs and connected vehicles in India. We expect Bosch’s earnings to clock a 26.4% CAGR during FY22-FY24E, driven by a 20% revenue CAGR and a 240-bps rise in EBITDA margin expansion to 14.8% in FY24E from 12.4% in FY22.
Outlook
We retain Buy on Bosch Limited (Bosch) with a revised PT of Rs.19,795, led by a robust demand outlook in the automotive business across segments, access to robust e-mobility technology, and continued focus on improving content per vehicle.
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