INDUS Holding AG: NuWays AG Recommends BUY despite Mixed Q2 Results

NuWays AG has updated its recommendation for INDUS Holding AG, setting a target price of EUR 34.00. The update follows INDUS's Q2 results, which showed sales slightly below estimates but EBIT above expectations despite a challenging economic landscape.

Q2 sales fell 5.4% year-on-year to € 429 million, impacted by decreased customer spending due to the weak German economy. However, Q2 EBIT increased to € 37.4 million, with a margin nearly unchanged at 8.7%. Order intake in H1’24 fell by 1.3% year-on-year to € 828 million, but order backlog rose by 1.2% to € 720 million.

Segment-wise, Engineering sales dropped 1.4% year-on-year with EBIT down 37%. Infrastructure sales fell by 3.3%, but EBIT rose by 27.4% thanks to cost-cutting measures. Materials segment sales decreased by 10.6%, affected by declining prices in the agricultural sector.

INDUS is actively pursuing acquisitions with a budget of € 70 million for FY24, already spending € 18.5 million. Two acquisitions are expected to close soon.

NuWays AG reiterates a BUY recommendation, citing INDUS's attractive forward P/E ratio of 6.6x, a dividend yield of 5.7%, and a strong free cash flow yield.