|
Quantamental
Equity Research on VARROC ENGINEERING LTD | Release: 12 Dec 2018 13:58:35
UTC+05:30 | Reporting Currency: INR | Trading Currency: INR |
Exchange:NSE/BSE NSE CODE:VARROC and BSE CODE:541578 |
| Last Close: |
INR 648.9 |
| Fair Value: |
INR 921.15 |
| Est. Price by Mar 19: |
INR 450.6 |
| Market Capitalization (INR
Crs): |
8747.92 |
| Industry: |
Auto Parts & Equipment |
| Rating: |
STRONG BUY |
| Upside: |
42% |
| Company Profile |
|
|
| Varroc Engineering Limited is an India-based company. The
Company is focused on designing, manufacturing and supplying exterior
lighting systems, plastic and polymer components, and electrical and
electronics components. |
| Growth Per Share |
|
|
| Particulars |
1-Year |
3-Year |
5-Year |
|
| Revenue % |
11% |
55% |
|
|
| EBIT % |
43% |
11% |
|
|
| Earnings % |
44% |
2579% |
|
|
| Book Value
% |
29% |
161% |
|
|
| Stock Total
Return % |
|
|
|
|
|
| Share holding
pattern |
| Particulars |
%age |
|
| (A) Promoter
& Promoter Group |
85.00 |
|
| (B) FII/FPI |
6.92 |
|
| (C)
DII/Insurance Companies |
5.77 |
|
| (D) Public holding < 2 lakhs of cap. |
1.28 |
|
| (E) Others |
1.03 |
|
| Grand Total |
100.00 |
|
|
| Fundamentals
(Historical and Estimated) |
| Particulars |
Mar-15 |
Mar-16 |
Mar-17 |
Mar-18 |
Mar-19 E |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
|
| Price |
|
|
|
|
451 |
584 |
727 |
868 |
992 |
|
| Return on Equity |
2% |
21% |
14% |
16% |
14% |
16% |
16% |
17% |
16% |
|
| Price to Earning |
|
|
|
|
12.9 |
12.9 |
12.9 |
12.9 |
12.9 |
|
| EVTI |
|
|
|
|
0.5 |
0.5 |
0.5 |
0.5 |
0.5 |
|
| EVTIFM |
|
|
|
|
12.9 |
12.9 |
12.9 |
12.9 |
12.9 |
|
| Price to Book Value |
|
|
|
|
1.8 |
2.0 |
2.1 |
2.1 |
2.1 |
|
| Debt to Equity |
1.5 |
0.9 |
0.7 |
0.4 |
0.4 |
0.2 |
0.0 |
0.0 |
0.0 |
|
| Dividend Yield |
|
|
|
|
0% |
0% |
0% |
0% |
0% |
|
| Cash Flow to Firm |
-103% |
-14% |
30% |
46% |
7% |
10% |
12% |
18% |
19% |
|
|
| Detailed
Estimates |
| Title |
Mar-18 |
Mar-19 E |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
|
| Sales |
10,278.83 |
12,817.82 |
15,352.66 |
17,632.62 |
19,382.71 |
20,351.85 |
|
| EBITDA |
985.20 |
1,282.42 |
1,536.02 |
1,764.13 |
1,939.23 |
2,036.19 |
|
| EBIT |
598.73 |
800.48 |
1,008.83 |
1,213.39 |
1,391.01 |
1,571.90 |
|
| PBT |
512.56 |
714.31 |
925.20 |
1,152.34 |
1,376.22 |
1,571.90 |
|
| NPAT |
450.26 |
470.98 |
610.03 |
759.80 |
907.41 |
1,036.44 |
|
| Price to
Earning |
- |
12.90 |
12.90 |
12.90 |
12.90 |
12.90 |
|
| Price to Book
Value |
- |
1.85 |
2.03 |
2.12 |
2.13 |
2.06 |
|
| Debt to
Equity |
0.42 |
0.35 |
0.22 |
0.04 |
- |
- |
|
| Return on
Equity |
0.16 |
0.14 |
0.16 |
0.16 |
0.17 |
0.16 |
|
| Enterprise Value to Total Income (EVTI) |
0.08 |
0.53 |
0.54 |
0.54 |
0.52 |
0.51 |
|
| Enterprise Value to Total Income to Firm Margin(EVTIFM) |
1.99 |
17.90 |
17.27 |
16.57 |
15.30 |
13.86 |
|
| Price or Est.
Share Prices |
- |
450.60 |
583.63 |
726.91 |
868.14 |
991.58 |
|
|
| DISCOUNTED CASH
FLOW |
| Title |
Mar-19 E |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
|
| PBT |
714.31 |
925.20 |
1,152.34 |
1,376.22 |
1,571.90 |
|
| Interest |
86.17 |
83.63 |
61.05 |
14.79 |
- |
|
| Depreciation |
481.93 |
527.20 |
550.75 |
548.22 |
464.29 |
|
| Cash Flow
Before Tax |
1,282.42 |
1,536.02 |
1,764.13 |
1,939.23 |
2,036.19 |
|
| Tax Rate |
33.99 |
33.99 |
33.99 |
33.99 |
33.99 |
|
| Cash Flow
After Tax |
846.52 |
1,013.93 |
1,164.50 |
1,280.09 |
1,344.09 |
|
| Terminal Cash
Flow |
- |
17,963.94 |
|
| Total Cash
Flow |
846.52 |
1,013.93 |
1,164.50 |
1,280.09 |
19,308.03 |
|
| Present Value of
Cash Flow |
12,417.58 |
|
| Debt |
- |
|
| Value of Equity |
12,417.58 |
|
| Fair Value Per
Share |
921.15 |
|
|
| Equity |
|
|
|
|
8,748 |
|
| Debt |
|
|
|
|
1,193 |
|
|
| Beta |
Take from Reuters |
|
|
1.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Risk Free Rate |
Prevailing Yield in India |
|
|
7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Market Risk Premium |
Assuming 8.82% premium
for Equity Investments |
7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest Paid |
|
|
|
|
86 |
|
| Tax Benefit |
|
|
|
|
10 |
|
| Interest Net of Tax |
|
|
|
|
76 |
|
| Debt |
|
|
|
|
1,193 |
|
| Cost of Debt |
|
|
|
|
6% |
|
| Cost of Equity |
|
|
|
|
17% |
|
| Debt Weight |
|
|
|
|
12% |
|
| Equity Weight |
|
|
|
|
88% |
|
| WACC |
|
|
|
|
15% |
|
|
| Cash Flow of Mar-23 E |
|
|
|
|
1,344.09 |
|
| Growth |
|
|
|
|
7.7% |
|
| Present Value of Terminal
Cashflow |
|
|
|
|
17,963.94 |
|
|
| Peer Comparision |
| # |
Name |
CMP
Rs. |
Mar
Cap Rs.Cr. |
B.V.
Rs. |
Annualized
ROE % |
ROCE
% |
Latest
EVTI |
Latest
EVTIFM |
CMP
/ BV |
P/E |
Debt
/ Eq |
Div
Yld % |
Growth
Rate R % |
SGR
% |
Ann
Total Income |
Unpledged
Prom Hold % |
PQEIOI |
QoQ
Sales % |
Qtr
Sales Var % |
QoQ
Profits % |
Qtr
Profit Var % |
Graham's
Number Rs. |
| 1 |
Motherson Sumi |
149.45 |
47,195 |
33.70 |
18.46 |
19.86 |
0.89 |
34.89 |
4.43 |
27.45 |
1.05 |
1.00 |
12.99 |
10.66 |
60,710 |
59.06 |
158 |
2.23 |
12.55 |
-16.25 |
-15.60 |
61.45 |
| 2 |
Bosch |
19,105.55 |
58,312 |
3,424.93 |
21.16 |
22.73 |
3.83 |
43.72 |
5.58 |
35.86 |
- |
0.52 |
16.45 |
34.69 |
13,362 |
70.49 |
208 |
-0.34 |
13.84 |
-2.55 |
18.86 |
6,287.47 |
| 3 |
Exide Inds. |
250.90 |
21,327 |
68.05 |
25.70 |
20.08 |
1.70 |
30.87 |
3.69 |
28.64 |
- |
0.96 |
17.86 |
27.15 |
11,361 |
45.99 |
144 |
-1.88 |
15.35 |
27.86 |
17.03 |
121.74 |
| 4 |
Amara Raja Batt. |
718.90 |
12,280 |
183.09 |
20.39 |
24.92 |
1.73 |
28.22 |
3.93 |
25.72 |
0.02 |
0.58 |
17.32 |
15.27 |
7,069 |
52.06 |
116 |
-1.44 |
22.81 |
6.37 |
-5.49 |
339.38 |
| 5 |
Varroc Engineer |
648.90 |
8,748 |
217.67 |
17.65 |
15.52 |
0.76 |
25.55 |
2.98 |
18.97 |
0.42 |
0.07 |
17.41 |
17.37 |
12,107 |
85.00 |
116 |
2.53 |
24.05 |
0.43 |
8.95 |
- |
| 6 |
Endurance Tech. |
1,143.20 |
16,081 |
170.07 |
29.19 |
23.06 |
2.10 |
33.68 |
6.72 |
34.91 |
0.37 |
0.35 |
24.99 |
24.87 |
7,779 |
82.50 |
137 |
4.10 |
23.18 |
0.50 |
25.61 |
347.68 |
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