3M India Q4 Results Review - Strong Increase In Dividend Payout Ratio, EVA Accretive: ICICI Securities

Maintain Buy with a revised DCF-based target price of Rs 39,500 (implying 62 times FY26E earnings per share; earlier target price: Rs 38,400).

3M India Ltd. (Source: Company website)

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

3M India Ltd. has declared/paid total dividend per share (including special dividend) of Rs 1,635/share over FY22-24, indicating dividend payout ratio of 141%.

We see the change in dividend policy as a structural re-rating event. Prior to FY22, the company used to hold large cash which used to impact return ratios.

We believe the change in dividend policy is EVA accretive. Other takeaways from Q4 FY24 result:

  1. Ebitda margin scaled to 21-quarter high of 19.6%, primarily due to lower input and staff costs. We believe operating leverage and cost-saving initiatives have also aided margin expansion.

  2. Healthcare segment reported strong growth (+18.8% YoY) after a blip in Q3 FY24.

We believe strong growth momentum in transportation and electronics, healthcare segment may anchor growth in FY25E. We believe consumer segment is showing signs of revival. The trend may accelerate further in rest of FY25E led by improving consumer demand.

We remain positive on 3M India led by established competitive advantages. Maintain Buy with a revised DCF-based target price of Rs 39,500 (implying 62 times FY26E earnings per share; earlier target price: Rs 38,400).

Click on the attachment to read the full report:

ICICI Securities 3M Q4FY24 Results Review.pdf
Read Document

Also Read: Blue Jet Healthcare Q4 Results Review - Growth To Ride On New Products: ICICI Securities

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

lock-gif
To continue reading this story You must be an existing Premium User
Watch LIVE TV, Get Stock Market Updates, Top Business, IPO and Latest News on NDTV Profit.
GET REGULAR UPDATES