Contact Us | Log In
Search
Sensex: 35511.6 +251.30 Gold: Rs.29753.00
Nifty: 10894.7 +77.70 Silver: Rs.38989.00
Garware-Wall Ropes Q2FY18: Continues the healthy trend of improving EBIDTA margins, Overweight - IndiaNotes.com
Garware-Wall Ropes Q2FY18: Continues the healthy trend of improving EBIDTA margins, Overweight
Firstcall India Equity | Published: 04 Dec, 2017  | Source : IndiaNotes.com

Highlights:

 

- Garware-Wall Ropes Limited manufactures and sells various products, such as ropes, twine, yarn, fishnet, nettings and technical textiles.


- The company has achieved a turnover of Rs. 2059.91 million for the 2nd quarter of the FY 2017- 18 as against Rs. 2260.88 million in the corresponding quarter of the previous year.


- During the quarter, EBIDTA stood at Rs. 474.76 million as against Rs. 437.56 million in the corresponding period of the previous year, up by 8.50%.


- PBT stood at Rs. 414.61 million in Q2 FY18 against Rs. 385.36 million in the corresponding quarter of the previous year, grew by 7.59%.


- During the quarter, net profit increased by 6.88% to Rs. 281.52 million from Rs. 263.41 million in the corresponding quarter ending of previous year.


- EPS of the company stood at Rs. 12.87 in Q2 FY18 as against Rs. 12.04 in the corresponding quarter of the previous year.


- During the quarter, EBIDTA and PAT margins are stood at 23.05% and 13.67% respectively.


- Net Sales and PAT of the company are expected to grow at a CAGR of 5% and 26% over 2016 to 2019E, respectively.


Outlook and Valuation

 

At the current market price of Rs.914.55, the stock P/E ratio is at 20.70 X F Y18E and 18.32 X FY19E respectively. Earning per share (EPS) of the company for the earnings for F Y18E and FY19E is seen at Rs. 44.18 and Rs. 49.91 respectively.


Net Sales and PAT of the company are expected to grow at a CAGR of 5% and 26% over 2016 to 2019E, respectively.


On the basis of EV/EBITDA, the stock trades at 12.69 X for F Y18E and 11.43 X for F Y19E.


Price to Book Value of the stock is expected to be at 3.67 X and 3.05 X for F Y18E and F Y19E respectively.


Q2 is company’s domestic centric quarter. In this period, domestic fisheries contributes to a large proportion of the overall sales and has been informed in previous months, The company have been seeing a short term disruption in domestic business on account of GST implementation, more particularly in the Fisheries sector. The distribution channel had not geared up for GST on time and the increased taX rate on Fishnets had put significant inflationary pressure on the end consumers. However, the recent reduction in GST rates on Fishnets and some Agriculture products is good news and is eXpected to impact demand positively and get secondary sales back on track. Nevertheless The Company have been able to continue the healthy trend of improving EBIDTA margins which increased to 20.5% thereby allowing to increase overall profit before taX by 19.3% for the half year. International markets continue to do well with a strong order book for differentiated product portfolio and the Company eXpects to resume normal profit growth from Q3. Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

  Read full report Click here to read the full report


About Firstcall India Equity

Firstcall India Equity of Firstcall India Equity Advisors Pvt. Limited (FIEA), is a leading financial services provider in India and a SEBI Registered Category-I Merchant Banker. FIEA is a culmination of a credible Equity Research Capabilities, Long Standing Relationship with leading FIIs, DFIs, MFs, Overseas Pension Funds etc. The company’s research caters to the needs of the largest news wire and media houses of the world namely Reuters, Thomson, Capital IQ, Themarkets.com, Emerging Markets Euro money Publications-UK. The Company is among the major players in the Debt and Equity markets.


For more information please write in to editor@indianotes.com

 

Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.

 
BSE : 1,002.70 -17.25
(-1.69%)
NSE : 1,003.60 -16.40
(-1.61%)
Read More