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Motilal Oswal Report
Motilal Oswal has initiated coverage on Fujiyama Power Systems Ltd. with a 'Buy' rating and has set a target price of Rs 340 from the current market price of Rs 260, implying a potential upside of 31%.
According to the brokerage the growth is driven by the PMSGMBY scheme and its in-house DCR plant, supporting demand capture. Backward integration boosts margins, while expansion into Li-ion and inverters and a growing distribution network strengthen its market reach.
In the absence of a direct listed peer, the company is valued using an equalweighted mix of consumer durables, solar, and battery peers. Factoring in company's relatively modest scale, the brokerage applies a ~37% discount to the ~24x FY28 average P/E, the company is valued at 15x FY28E EPS.
Fujiyama Power Systems delivered strong growth with a compound annual growth rate of 45%/78%/76% in revenue/Ebitda/adjusted PAT over FY22–25. It is expected to post a CAGR of 56%/65%/65% over FY25–28 and currently trades at 27x/16x/11x FY26E/FY27E/FY28E EPS, with RoE/RoCE of 33%/28% in FY28E.
Motilal Oswal values the company at 15 times FY28E earnings per share with a target price of Rs 340 and a Buy rating.
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