Equity master predicts only a 11% CAGR from here on! reason for which I have not been able to fathom, not from their write-up atleast. But am wanting to discover if there are some negatives!
On scrutinising the text below everything mentioned is a positive for the stock including ability to pass on price increases, etc. The only negative mentioned is aggressive expansion plans.
They seem to have reached full achievable capacity. The land 100 acres is acquired, ECB loans tied up at 3-4% cost, so there aren't big execution risks. Are there marketing risks for such a big expansion?
Maybe but with BKT being an entrenched brand priced at steep discounts, volumes were never an issue. Unlikely that the company will make such an error of judgement in estimating demand given their track record.
Has the stock run up too fast?? don't think so - at 7x TTM PE, it is by far the best tyre company with great numbers and good visibility into revenue growth with ability to protect margins around historical levels.
So what's the catch? maybe we should write to equity master asking them why the pessimism?