Top Picks Post Q3FY17 Results By IndiaNivesh

We expect AHL to report 10% revenue CAGR over FY16‐19E on the back of improving deliveries in its key projects, while PAT is likely to witness 10.9% CAGR during FY16‐19E with PAT margins expanding by 360bps over the same period. At CMP Rs 183, AHL is trading at FY17E and FY18E, EV/EBIDTA multiples of 14.4x and 10.8x respectively. We had a BUY rating on the stock with a target price of Rs 183 which has already been achieved. We remain bullish on the company from longer term perspective and maintain our BUY rating on the stock with a revised target price of Rs 220 (arrived on the basis of NAV based SOTP valuation).

At CMP of Rs 1,526, BEL stock is trading at FY2018/19E, P/E of 21.7x/18.3x, respectively. Considering the huge awarding pipeline (inc. ~$2 bn Akash Missiles project), where BEL stands good chance to win, current OB/LTM sales ratio of 4.3x, recent Elbit offset win, we expect BEL to top‐line/ bottom‐line CAGR of 13.8%/14.2% during FY2017‐19E. This coupled with strong BS, RoE expansion (from 15.5% in FY2016 to 19.0% in FY2019), we assign 1‐year forward P/E multiple of 23.0x to our FY2019E EPS estimate of Rs 83.3/share. Accordingly,we arrive at price target of Rs 1,916. Given the upside we recommend BUY on the stock.

Considering the growth in the luxury car segment, we see strong revenue growth from auto component business that will help in overall margin expansion. Strong demand for Force Traveller from multiple industries augur well for the company in the coming months. The company is a net debt free company, sitting on cash and cash equivalents of around Rs. 3.5 bn (Rs. 265/share) as on 30th Sep 2016. We have introduced FY19 estimates. At
CMP of Rs. 4101, Force Motors is trading at 19.6x FY19e earnings; we maintain BUY with a target price of Rs. 4698 (based on 22x FY19e earnings).

At CMP of Rs 333, JBCP is trading at 15.4x/13.1x & 11.3x of FY17E/FY18E/FY19E EPS respectively. We maintain BUY rating with target price of Rs 440 (15xFY19e EPS).

Life science ingredient segment (50% of total sales) – better margins in this segment to drive profitability of this segment

– JOL is witnessing trend reversal in this business from de‐growth & falling realization in last few years to increase in demand as well as prices. JOL has taken price hike of around 15% from January 2017 in some of the products in this segment. This price hike is outcome of better market conditions & not the increase in input prices. We expect JOL to sustain sales and profitability in this segment

– JOL has net debt of Rs37.4bn at the end of Q3FY17. This is Rs 550 mn lower than net debt at end of Q2FY17. JOL has taken many measures to reduce the cost of debt by refinancing means. Blended cost of debt has come down by 120 bps from Q3FY17 onwards to 6.3%. The management has been focusing on reduction of debt through internal accruals. We believe consistent debt reduction may become a re-rating trigger for the stock.