Please refer to important disclosures at the end of this report
Swaraj Engines Limited (Swaraj) is engaged in manufacturing engines for fitment
into Swaraj tractors which is manufactured by Mahindra & Mahindra (M&M).
Swaraj because of its strong brand focus and product innovation is poised to
benefit from the improvement in rural economy over the next few years. The
Indian Meteorological Department (IMD) has forecast near normal rainfall at
96% of LPA for upcoming monsoon season 2017. This is likely to result in robust
farm production and consequent increase in farm income, boosting rural
demand, thereby benefiting all farm mechanisation companies including Swaraj.
The tractor growth momentum will continue on the back of pent-up demand and
improved sentiment backed by normal monsoon. After a drought-hit FY15/FY16,
tractor sales recovered sharply in FY17 and it is expected that the growth
momentum will continue in years to come and Swaraj seems to benefit because
of its strong financials and quality earnings. The company has an excellent
balance sheet with no debt on its books, negative working capital cycle and
robust return ratios amidst healthy dividend payouts (~75%). The company has a
good return on equity (ROE) of 27.09% for the last 3 years and has been
maintaining a healthy Dividend yield of 1.78%. Hence Buy.
CMP `1,852
52 Week High / Low
Avg. Daily Volume
Capital Goods
Market Cap (` cr)
BSE Sensex
Face Value (`)
Reuters Code
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Swaraj Engines
Others | Capital Goods
May 18, 2017
Swaraj Engines | Capital Goods
May 18, 2017
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Swaraj Engines
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)