Sharda Motors cmp 1038. Company is an auto ancillary company, with net cash balance sheet and high ROE/ROCE. FY 23 con EPS 70. Company has shown consistent growth in topline and bottomline since 2020.
Stock price crossed its previous all time high of 600 (posted in 2017) in July 2021 and went on to hit a swing high of 954 in Dec 2021. Since then it had been consolidating between 600-900 and in Sep 2023 crossed its previous all time high of 954 and hit a fresh swing high of 1100.
The consolidation from July 2021 to July 2023 is in the form of a flag pattern (marked in green) , with flagpole extending from 170 to 950 and breakout point being 900. Pattern target if the pattern plays out can be in excess of 1600. (weekly chart attached)
Fundamentally company is claiming to have strong tailwinds going ahead due to change in emission norms (TREM V AND TREM VI, AND RDE) affecting the tractors, CV and other off the road vehicles. One can study the company by going through annual reports, concalls and presentations. Most of the details are discussed in concall.
One of the reasons for relatively ( in context of overall sector and market) cheap valuations inspite of stock price being at all time high ( 15 PE for a debt free company with consistent good growth) could be the concerns regarding terminal value assigned to a business which largely caters to ICE vehicles.
disc: invested as a techno funda bet. (not a recommendation. anyone contemplating investing should do their own diligence and research)
