Motilal Oswal Reiterates Buy On Midcap Automobile Sector Stock, Shares Can Surge 18%

Leading brokerage firm Motilal Oswal Financial Services reiterates 'Buy' call on Craftsman Automation Ltd. (CRAFTSMA) with a target price of Rs 4750 apiece. According to the brokerage's given target price, the stock can give up to 18% return if purchased at the current market price.

Craftsman Automation is a midcap company that operates in the Automobile sector. The company manufactures several components and sub-assemblies on a supply and job-work basis according to client specifications in the automotive, industrial, and engineering segments. It has a market valuation of Rs. 8,545.66 Crore.

Valuation & view

Motilal Oswal Financial Services said, "We marginally raise our earnings estimates by ~1%/3% for FY24/25 to factor in the ramp-up in the aluminum business. CRAFTSMA's track-record of creating and gaining market leadership organically is uncommon in the Auto Component industry. This has enabled it to deliver a healthy balance of strong growth and superior capital efficiencies. However, the same is yet to fully reflect in its valuations of 23.5x/18.1x FY24E/FY25E consolidated EPS."

It added, "We estimate a consolidated revenue/EBITDA/PAT CAGR of 27%/28%/ 39% over FY23-25 (partly due to the full-year consolidation of DRA). We increase our target multiple to 20x from 18x to factor in the continued strong growth momentum as well as capital efficiencies. Reiterate BUY with a TP of INR4,750 (based on 20x Jun'25E consolidated EPS)."

Stock Outlook - Current Market Price, 52-Week Low/High, & Returns

On Wednesday, Craftsman Automation's stock closed 1.33% i.e. Rs 54.05 down at Rs 4044.65 apiece on BSE. The stock is trading 2.34% down from its 52 week high of Rs 4139.10. The stock traded its 52 week low at Rs 2174.

It jumped 1.10% in the past 1 week. In 1 month, it jumped 15.82% and in 3 months, it jumped 34.18%. It gave 83.63% in 1 year, and 130.49% in 2 years, respectively.

Disclaimer

The above-mentioned stock has been picked from the brokerage report of Motilal Oswal Financial Services. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.