Mid & Small Cap Top Picks - Auto & Auto Anc. Given the recent SEBI circular on minimum sector allocation criteria for MultiCap Fund, there will be a shift of fund from large cap to Mid and Small Cap companies. Given recovery in 2W/PV OEMs volume and acceleration in Abhishek Jain replacement segment demand, we expect B2B and B2C auto component Analyst players to witness recovery in earnings. We expect B2B players with higher +9122 40969739 exposure to 2W/PVs (Sandhar Technologies, Suprajit Eng, Minda Corp,
[email protected] Subros, Asahi India, JBM Auto and Lumax Auto Tech) to be better placed in Auto and Ancillary space. Among B2C players, we expect Amara Raja Ketul Dalal Batteries, Exide Industries and CEAT to benefit. Associate +91 22 40969770 In Midcap space we prefer Escorts, Ashok Leyland, Exide and Amara Raja
[email protected] Batteries. Kripashankar Maurya In the Small Cap space, we prefer Asahi India Glass, CEAT, JBM Auto, Lumax Associate Auto Tech, Minda Corp, Sandhar tech, Sterling Tools, Subros, Suprajit Eng, +91 22 40969741 Varroc Eng. kripashankarm@dolat Selling pressure may be seen in – MSIL and Eicher Motors due to rich valuations. Top Picks in Mid and Small Cap - Auto Universe P/E Debt Debt/ Net D/E Total FCF Total FCF Company MCap CMP EPS (Rs/sh) EPS gr (%) (x) (Rs mn) EBITDA (x) (Rs mn) (3yr)/Mcap (Rs bn) (Rs) FY21E FY22E FY23E FY21-23E FY23E FY20 FY20 FY20 FY21-23E (%) Escorts 146 1192 52.7 63.8 80.7 15 14.8 483 0.07 -0.08 14,246 10 B2B Players Asahi India Glass 53 217 2.2 7.8 11.1 71 19.5 17,617 4.05 1.09 11,559 22 Bharat Forge 214 460 6.1 15.7 21.7 53 21.2 38,784 3.48 0.43 11,071 5 Jamna Auto Ind 18 46 0.3 1.2 2.2 95 20.7 1,557 1.36 0.29 1,490 8 JBM Auto 11 231 14.6 20.6 30.7 28 7.5 5,459 2.37 0.76 3,184 29 Lumax Auto Tech 6 93 4.4 7.1 8.8 26 10.5 949 1.04 -0.03 670 11 Lumax Inds.