Skipper Ltd

Skipper Ltd.: Towering ahead - BUY CMP: ₹130, 1-yr Target: ₹200, Upside: 53.5% Skipper Ltd is one of the leading manufacturers and suppliers of telecom and transmission towers in India. Skipper's earnings almost tripled over the past three years following restructuring of its engineering division and focus on domestic transmission and distribution (T&D). Its order book doubled over the past two years to ₹2,240cr, driven by its agreement with Latin America's biggest Transmission Service Operator (TSO) and increased ordering from Power Grid. We believe Skipper would be a major beneficiary of robust capex in the domestic T&D space. Its margins are better than those of peers due to its strategic location and backward integration capabilities. The PVC segment's revenue is likely to surge 3.5x over FY15-18, driven by ramp-up of new capacities in PVC products. Considering strong execution and higher share of exports coupled with lower input costs, we estimate 50% earnings CAGR over FY15-18E. We value the company at 13x FY18E P/E and recommend BUY with TP of ₹200.

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