3M India - Strong Growth In End-User Industries Leading To Healthy EVA Creation: ICICI Securities

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:

1. strong brands,

2. established distribution network,

3. global relationships with large manufacturers, and

4. 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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