Buy NRB Bearings, target price Rs 270: ICICI Direct

economictimes.indiatimes.com:

NRB Bearings with a target price of Rs 270. The current market price of NRB Bearings is Rs 212.Time period given by analyst is a year when NRB Bearings price can reach defined target.

NRB Bearings, incorporated in the year 1965, is a Small Cap company (having a market cap of Rs 2044.58 Crore) operating in Auto Ancillaries sector. NRB Bearings key Products/Revenue Segments include Bearings, Scrap, Export Incentives and Other Operating Revenue for the year ending 31-Mar-2022.Financials For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 315.21 Crore, up 18.83 % from last quarter Total Income of Rs 265.27 Crore and up 20.88 % from last year same quarter Total Income of Rs 260.76 Crore.

Company has reported net profit after tax of Rs 33.74 Crore in latest quarter.Investment RationaleThe brokerage believes with a visibility of 24% PAT CAGR over FY23-25E and a controlled leverage, NRB is highly undervalued across the bearings space(other players quoting at 40x-50x on 2 year forward EPS). Even, discounting the fact that it has one segment exposure unlike other bearings companies, still the stock remains undervalued and the brokerage expects a rerating to set in.