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Geojit BNP Paribas
Banco Products (Buy)
CMP: ₹153.75
Target: ₹171
Founded in 1961, Banco Products ltd (BPIL) is a manufacturer of radiators and gaskets that have applications in automobiles, oil engines, compressors and locomotives. Eighty per cent of the company’s revenue comes from the commercial vehicles (CV) Industry.
Banco’s mission is to provide customers quality products at the best value along with service and professionalism that is a step above customer's expectations.
We expect domestic CV industry to grow at 10 per cent CAGR on better growth in road infra projects and improvement in fleet operators’ business model which will push volume growth in radiator sales.
BPIL’s standalone revenue (70 per cent from domestic) grew 17 per cent y-o-y in FY16 with increase in demand from OEMs (original equipment manufacturers) and aftermarket sales. Slowdown in international truck sales has been impacting the overseas business. We expect subdued demand has come to its bottom and will start witnessing some recovery.
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