Multibagger stock: Over 4400% return in 10 years! KR Choksey sees further upside in Pitti Engineering

Shares of Pitti Engineering Limited (PEL) have delivered over 4400 per cent return in the last 10 years. The multibagger stock is also up over 1,300 per cent in the last 5 years and has also recovered over 175 per cent from its 52-week low of Rs 267.90.

KR Choksey, in its recent report, has maintained its 'Buy' rating on this multibagger stock with a target price of Rs 1,083, signalling an upside potential of per cent. According to the brokerage firm, the company has finalized an agreement with Bagadia Chaitra Industries Private Limited (BCIPL) to enhance its market footprint in South India.

"Through this acquisition, PEL is targeting an increase in its capacity to approximately 90,000 tonnes. The combined market size for small and large motors stands at approximately 700,000 tonnes RME. With this strategic move, PEL anticipates securing a market share of approximately 12 per cent to 13 per cent in the broader Indian market. Specifically, the small motor segment accounts for approximately 5,000 to 6,000 tonnes per market, apart from home appliances, pumps, and alternators," it said.

KR Choksey also noted that the acquisition offers PEL numerous financial advantages, including an expanded presence in South India, bolstered asset base, and increased production capacity, facilitating entry into new sectors and customer acquisition. Synergies in sales and marketing are anticipated to drive cross-selling opportunities, enhancing market penetration and supporting PEL's growth strategy.

It believes the acquisition will bring in new customers, create synergies in sales and marketing, and enable Pitti Engineering to sell its existing product portfolio to these new customers, thereby enhancing market penetration and revenue streams. 

The brokerage firm expects the Revenues/ EBITDA/ PAT to grow at a CAGR of 20.4/23.8/39 per cent, respectively, over FY23-26 led by the healthy growth in the organic business driven by its order book and also supported by the inorganic synergies.

About Pitti Engineering Limited

Pitti Engineering Limited is the manufacturer of electrical steel laminations, sub-assemblies for motor and generator cores, die-cast rotors and machined casted and fabricated parts and shafts.

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