3M India - Strong Growth In End-User Industries Leading To Healthy EVA Creation: ICICI Securities
Steady launch of new products.
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ICICI Securities Report
We remain enthused about 3M India Ltd. post analysing its FY23 annual report. Key highlights:
Most end-user industries – e.g. automotive, infrastructure and manufacturing – have reported revival, which augurs well for 3M India.
Company has passed on additional costs with a lag and, with relatively stable exchange rates, it improved its Ebitda margin to 15.3% in FY23 from 11.7% in FY22.
3M India has continued to introduce multiple new products and invest in partnerships. We model these investments to be discounted cash flow-accretive.
We remain positive on 3M India due to its competitive advantages such as:
established distribution network,
global relationships with large manufacturers, and
access to parent’s technology pool.
Maintain 'Buy' with a revised DCF-based target price of Rs 35,200 (implied price/earning 56 times FY25E earnings per share).
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