Force Motors Ltd Initiating Coverage Report By IndiaNivesh

For Force motors we believe the picture will reverse In FY20 compared to current year with Auto components segment contributing 54% to the revenues (from current 30%) and Automotive sales contribution falling to 44% levels (from current 68%) of the total revenue. With higher volumes, operating leverage would kick in further which could mean an EBITDA margin of close to 10% and NPM of around 7% in 2020. This would result in Net Profit of Rs 4398 million and EPS of ~Rs 334. With such consistent performance of Sales CAGR of 22% and Profit CAGR of 37% over FY15‐FY20E, the multiple can easily expand to 30X giving a target price of ~Rs 10,011 in 2020.

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