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Clutch Auto – Outperformer ICICI Research

April 26, 2007

ICICI in its research report released jus ta while ago has said that Clutch Auto will be an outperformer with a price target of Rs 260 [ 99%] appreciation from current levels.

Clutch Auto Ltd reported a splendid performance for the year ended March 31, 2007 (FY07), exceeding our estimates. Net sales surged 56.8% to Rs 235.5 crore against Rs 150.2 crore in FY06. This was much above our estimate of Rs 214.2 crore. Though contribution from exports were below from our estimates of Rs 97.5 crore, the 81.3% surge in domestic revenues more than made up for the shortfall.

At the current price of Rs 130, the stock trades at 5.1x its FY08E EPS. The stock underperformed the BSE Sensex mainly due to the company’s poor performance on the export front. The margin pressure would continue and this is the major cause of concern. However, ICICI continues to remain bullish on the company. Read the entire report here.

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