Stocks To Buy: Goldman Sachs sees 60% upside for this castings maker on strong earnings ramp-up

Brokerage firm Goldman Sachs maintained its “buy” recommendation on PTC Industries Ltd. after its fourth quarter results on Monday, June 1, projecting an upside potential of 60% from current levels.Goldman Sachs’ “buy” rating comes with a price target of ₹25,770, which is also the highest among the three analysts that cover the stock. All three have a “buy” rating on the manufacturer and supplier of castings, machine components and fabricated parts for critical and super-critical applications globally.

The brokerage sees a strong earnings ramp-up for PTC Industries after financial year 2029, which will be driven by existing contracts and capacity additions through financial year 2027.
Goldman Sachs also wrote in its note that the capacity expansion for the company’s metals & castings business is progressing and new contracts are now moving from qualification to production stages.
Better cash conversion is a key positive for PTC Industries, according to Goldman Sachs.For the March quarter, PTC Industries’ profitability was largely driven by lower employee costs and other expenses. While employee costs as a percentage of sales fell to 19% from 25% last year, other expenses as a percentage of sales fell to 30% from 40% last year.

However, for the full year, PTC Industries missed its revenue guidance of ₹750 crore, while margins stood at 22%, compared to the guidance of 20% to 25% range.

PTC Industries expects the export order book to start building in the coming years with the company anticipating overall revenue of ₹1,700 crore in financial year 2027. The company also expects margins to cross 35% in the next five years.

Shares of PTC Industries are trading 17% higher on Monday at ₹18,792. This is the biggest single-day gain for the stock since June 2024. The stock has gained in five out of the last six trading sessions.