Buy Jindal Worldwide for a target of Rs124

Firstcall India Equity | Dec. 10, 2015, midnight

Jindal Worldwide Ltd is the leader in Indian Textile Industries and is operating in Indian contingent as well as having its international collaboration and clients in north and South America to Europe, Africa and Middle-East Asia.


The company has achieved a turnover of Rs. 2114.42 million, an increase of 7.87% y-o-y for the 2nd quarter of the financial year 2014-15 as against Rs. 1960.19 million in the corresponding quarter of the previous year.


In Q2 FY15, Net profit stood at Rs. 68.25 million, as against Rs. 68.62 million in the corresponding  quarter of the previous year.


In Q2 FY15, Operating profit or EBIDTA grew by 16.90% y-o-y of Rs. 246.09 million as against Rs.210.51 million in Q2 FY14.


Profit before tax (PBT) at Rs. 86.43 million in Q2 FY15 compared to Rs. 85.45 million in Q2 FY14, registered a growth of 1.15%.


For half year end of FY15, the company registered a growth of 11.59% in Net sales to Rs. 4285.54 million from Rs. 3840.50 million for half year ended of FY14.


Operating profit grew by 28.48% to Rs 491.99 million in the end of H1 FY15 from Rs 382.92 million in the end of H1 FY14.


Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 31% over 2013 to 2016E respectively.

 

Outlook and Conclusion


At the current market price of Rs. 109.15, the stock P/E ratio is at 7.86 x FY15E and 7.13 x FY16E respectively.


Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.13.88 and Rs.15.30 respectively.


Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 31% over 2013 to 2016E respectively.


On the basis of EV/EBITDA, the stock trades at 1.90 x for FY15E and 1.55 x for FY16E.


Price to Book Value of the stock is expected to be at 1.31 x and 1.11 x respectively for FY15E and FY16E.


We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also.


We recommend ‘BUY’ in this particular scrip with a target price of Rs.124.00 for Medium to Long term investment.

 

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