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ICICI Securities Report
Asahi India Glass Ltd.'s Q3 FY24 Ebitda margin, at 16.4%, slid 80 basis points QoQ and came in lower than our estimated 18%. The miss was driven by the auto segment's Ebit margin worsening by ~150 basis points QoQ to 10.5%; further weighed down by the architectural segment's Ebit margin slipping ~60 bps QoQ at 15.9%.
In FY24E, we believe, elevated capex for its greenfield plant with subdued margins in tow would likely exacerbate free cash flow/return on capital employed and consequently restrain any major re-rating from current levels.
We reduce our FY24E/FY25E earnings per share by 18%/16% driven by ~200 bps/190 bps cut in Ebitdam estimates.
Downgrade to 'Sell' (from 'Reduce') with a discounted cash flow-based revised target price of Rs 475 (earlier Rs 484), implying 20 times FY26E earnings per share.
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