– BRGD is set to leap into the next orbit, with significant scale-up across business segments. We expect revenue to double and PAT to treble over the next three years.
– Besides bright growth prospects, we believe BRGD has all the winning traits – enviable track record, product diversification, superior product quality, and good governance.
– FCFE of INR9.5b-10b over FY15-18 would be strong enough to drive BRGD’s capex and future acquisitions without hurting balance sheet strength. Its JV with GIC gives it added financial muscle.
– At 7x FY17E EPS and 1x FY17E BV, BRGD trades at a steep discount to peers with similar RoE outlook. Our SOTP-based target of INR232 implies ~50% upside. Buy.