Schaeffler India Falls On Kotak Institutional Equities' Downgrade

Shares of Schaeffler India Ltd. fell after Kotak Institutional Equities downgraded the stock.

The stock fell nearly 8% during the session, before closing with 4% losses. This followed a 5% decline on Friday. Its trading volume was more than twice the 30-day average, when markets closed on Monday.

Kotak Institutional Equities downgraded the stock to 'sell' from 'add', but maintained its target price of Rs 2,600 apiece—an implied downside of 23.98%.

The brokerage, in a note, said the strong medium-term growth opportunities are priced in. The company's growth potential in export market remained optimistic, but achieving 19% domestic revenue CAGR over calendar year 2021-35E will be a challenge. Schaeffler India exports industrial bearings to its parent entities.

Strong focus on product innovations (157 patent applications in five years), introduction of localised products are likely to aid business growth in export geographies. Besides, favourable cost structure in India, the parent's diversification supplier base from China are other positives, Kotak said.

Of the eight analysts tracking the company, four maintain a 'buy', and two each recommend a 'hold' and a 'sell', according to Bloomberg data. The 12-month consensus price target implies a downside of 17.6%.