Elantas Beck India (Elantas) is the Indian market leader in liquid insulation segment used in electrical equipments like motors, transformers, generators etc. Part of global specialty chemicals leader ALTANA Group, the company practically has no visible peer in ` 600 cr+ market in India. Elantas enjoys market leadership in both primary and secondary insulation market with over 35% market share.
Outlook & Valuation: Elantas is likely to post subdued CY17 mainly marred by GST woes and poor off take from customer side. The demand to pick up from CY18 onwards which will boost the earnings CAGR to 17% over CY18-20. Current valuations at 22.4x CY19 EPS, looks attractive considering its growth potential and high return ratios. We initiate coverage on Elantas with a Buy recommendation and Target Price of `2500 (26x CY19E EPS), indicating an upside of ~16% from the current
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