Brics PCG: 'Buy' Rico Auto

Brics PCG Research recommends to buy Rico Auto at the price of Rs 76 with a target price of Rs 124.

The company's recent licensing and technological assistance agreement with Teksid Aluminium (TA) of Italy- world's leading independent manufacturer of light metal castings for the automotive industry, with an annual turnover of around Rs 5800 crore to develop aluminium engine blocks and heads would be a high value addition to its product profile.

The stock trades at a P/E of  10.6x and cash earnings by 6.8x on a consolidated basis its FY08E earnings.