Shares of NRB Bearings Limited have doubled investors' money in the last 12 months. The stock rose 8 per cent to hit a new 52-week high of Rs 173.70 on the Bombay Stock Exchange (BSE).
It has surged from the Rs 75.7 mark to touch Rs 173.7. The small-cap stock has gained 129 per cent in the last one year and has risen 69.5 per cent since the beginning of this year.
With a market capitalisation of more than Rs 1,600 crore, the shares stand higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
The largest manufacturer of needle roller bearings in India reported a 143 per cent year-on-year (YoY) rise in its net profit at Rs 22.57 crore for the quarter ended September 2021. Profit in the year-ago period stood at Rs 9.28 crore. Revenue from operations grew 30 per cent to Rs 242.8 crore in the September quarter compared to Rs 186 crore in the year-ago period.
Commenting on the performance, Harshbeena Zaveri, Managing Director said, "With strong R&D capabilities, Company has developed newer products with the adoption of BS VI norms and e-mobility trend. Going ahead we will leverage our capabilities to have market share gain. Our strong export order book is another advantage, and we expect substantial and continuing growth in exports with the re-structuring of our subsidiaries. We are gearing up for the ‘next normal’ as new opportunities and industry dynamics get redefined."
Brokerage firm Dolat Capital said NRB’s growth story is premised on revival in volume of OEMs (account for ~65-70% of revenue), increasing revenue from exports led by a recovery in the US and European truck /PV markets, improvement in Operating margin led by increasing presence in high margin export business and benefit of operating leverage and reduction in debt along with fall in interest cost.
It added that NRB is expected to be a key beneficiary of robust growth in the automobile sector, with the domestic OEM segment accounting for 70% of its revenue.
"NRB caters to almost all the segments in the automobile sector viz. 2W (30%), CV (32%), PV (21%) and farm/off-highway (17%). The company’s client portfolio is well-diversified, with the average contribution of any customer not exceeding ~10% of revenue," it said.
The brokerage firm expects revenue CAGR at 16% and EBITDA CAGR at 26% over FY21-24E and has a 'Buy' rating on the stock with a target price of Rs 182 per share (based on 15x for Sept 23E EPS).
According to MarketsMojo, the company has declared positive results for the last 4 consecutive quarters. The technical trend has improved from Mildly Bullish on November 18, 2021. The stock is technically in a Bullish range and multiple factors for the stock are Bullish like MACD, Bollinger Band, KST and OBV.
Also, the stock is trading at a discount compared to its average historical valuations and has an Attractive valuation.
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