Rolex Rings Share Price: Buy Rolex Rings, Target Price Rs 1910: HDFC Securities


Securities has a buy call on Rolex Rings with a target price of Rs 1910. The current market price of Ltd. is Rs 1731.75. The period given by the analyst is six months when the price of Rolex Rings Ltd. can achieve the set goal.

Rolex Rings Ltd., incorporated in 2003, is a small capitalization company (having a market capitalization of Rs 4738.73 Crore) operating in the automotive accessories business.

The main products/revenue segments of Rolex Rings Ltd. include forgings, scrap, export incentives and wind turbines for the year ending March 31, 2021.

finance

For the quarter ended 31-03-2022, the company reported total standalone revenue of Rs 294.90 Crore, up 21.51% from last quarter, total revenue of Rs 242.69 Crore and in up 37.48% from the same quarter last year, total revenue of Rs 214.50 Crore. The company reported a net profit after tax of Rs 39.06 Crore last quarter.

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Investment rationale
The company experienced strong growth in FY22 and management indicated that the momentum is expected to continue as it sees strong demand in both domestic and export markets. They have guided revenue of Rs.1250 Cr for this year and are confident of achieving a similar margin rate. To reduce the cost of electricity, the company has invested in renewable energy projects. It has already built wind turbines and has now invested in a solar power plant which will be fully operational by the end of FY23. The company is also looking to improve capacity utilization levels. To capture the growing opportunity of the EV space, management has been emphasizing this area and indicated that the share of EVs in total sales could increase up to 14-15% over the next 2 years, against 7% currently. RRL may earn higher valuations based on visibility of revenue and margins and whether its clients quote much higher valuations.

Promoter/Fii Holdings
The promoters held 57.64% of the company’s capital as of March 31, 2022, while the FIIs held 1.92% and the DIIs 20.36%.

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