Ventura Securities, which has a'subscribe' rating on the ongoing Uniparts India IPO, has set a base 18 month price target of Rs 711 for the stock, suggesting an upside of 23.2 per cent over the IPO price. The domestic brokerage has a bull case target of Rs 964 67 per cent potential upside and a bear case target of Rs 449 22.2 per cent potential downside for the stock.
By 12.30 pm, the IPO had generated bids for 20,07, 900 shares, which was 20 per cent of the total issue size of 1,01, 37,360 shares. A host of brokerages, including Nirmal Bang, Religare Securities, Hem Securities and KRChoksey Shares Securities, also have'subscribe' ratings on the issue.
With the gradual recovery in the global economy, rising infrastructure spend in the US, increase in farm income, shift in manufacturing to India, and increase in revenue growth of 12.5 per cent, Ebitda growth of 12 per cent, and PAT growth of 13.5 per cent, over FY 22 -- 25 in its base case scenario, Ventura said Uniparts can deliver revenue growth of 12.5 per cent, Ebitda growth of 12 per cent and PAT growth of 13.5 per cent.
It sees the Ebitda margin falling 26 bps to 21.6 per cent by FY 25 due to input cost pressure. The net margin is expected to increase by 40 bps to 14.2 per cent due to the reduction of debt burden.
In its bull case scenario, Ventura sees FY 25 revenues for Uniparts India at Rs 2,000 crore, up 17.7 per cent CAGR over FY 22 -- FY 25. It sees the net margin at 14.5 per cent.
We have assumed FY 25 revenues of Rs 1,500 crore FY 22- 25 CAGR of 6.9 per cent and net margin of 13.5 per cent and FY 25 P E of 10 times, which will result in a bear case price target of Rs 449 per share, a downside of 22.2 per cent from the IPO price it said.