Is Lloyds Engineering Works still a 'buy' after a 196% rally in 2023? Here's what Ventura Securities says
₹15.44 apiece at the start of 2023, have risen 196.43% to trade at the current value of ₹45.77. Founded in 1974, Lloyds Engineering Works (LEWL) is predominantly involved in the development, production, and deployment of robust equipment, machinery, and systems tailored for the hydrocarbon sector, oil and gas, steel plants, power plants, nuclear plant boilers, and comprehensive turnkey projects.
Also Read: Stock market last week: These 5 penny stocks gave up to 60% return Domestic brokerage firm Ventura Securities has recently initiated coverage on the stock with a 'buy' rating, setting a target price of ₹71 apiece, which signals an upside potential of 55% for the stock from its recent closing price of ₹45.77. According to the brokerage, Indian shipyards, both public and private, are operating at full capacity, with order books extending up to a decade.
Due to this limited capacity, new shipbuilding orders are anticipated to be directed to Lloyds Engineering Works. The brokerage expects the company's revenues to grow at a CAGR of 47% to ₹996 crore.
This stupendous growth in revenue is expected from higher-order inflow from marine, steel, and special civil engineering projects, its strategic capacity boost for future revenue growth, and its strategic positioning in the infrastructure sector and capex sector, aligning with a government spending surge. Also Read: 2023 in Review: Nifty Metal gains for 4th straight year; two stocks turn multibaggers Ventura expects the company's EBITDA and PAT to grow at a CAGR of 59% and 66% to ₹209 and168 crore, respectively.
It prokects EBITDA and PAT margins to increase by 430 and 500 basis points to 21% and 16.8%, respectively. Subsequently, it expects ROE and ROCE to enhance by 610 and
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