“Elecon Engineering Company (Elecon) is a leading manufacturer of industrial gears with the market share of 26%, operating in multiple core industries. It is also one of the largest players in material handling equipments (MHE) in India. Majority of its MHE revenues are derived from buoyant power sector. Elecon is also present in wind turbine segment. It has its state of the art facilities at Vallabh Vidyanagar, Gujarat. At the current market price of Rs 75, the stock is trading at a P/E of 13x, 11x and 8x of FY10E FY11E and FY12E earnings of Rs 5.7, Rs 7.1 and Rs 9.7 respectively. We recommend BUY rating on the stock with a target price of Rs 107/- (43% upside) in 18 months at the P/E of 11x on FY12 earnings of Rs 9.7, “says SKP Securities research report.

Related posts:

1. Accumulate Nitin Fire, target of Rs 266: SKP Securities
2. Buy AIA Engineering, target of Rs 178: Hem Securities
3. Buy Nestle India, target of Rs 1925: Hem Securities