Management in the recent concall answered my question related to margins. They said Germany operations will have 10-15% margins and India operations will have around 20-25% margins. Consolidated margins should be around 19-20%.
Peak revenue from current capacities is expected to be 1800-1900 crores. Assuming 1500 crore revenue and 20% EBITDA margins for FY24, gives 300 Crs EBITDA. Historically their EBIDTA to cashflow conversion has been good.
I believe it shouldn’t be priced at more than 15x EBITDA given the commodity nature of the product and increasing supply in the market. That translates into a valuation of 4,500 crore vs current market cap of 7,000+ crore.
Disc: I hold some shares and not planning to exit, but won’t buy at these levels either.
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