Buy this textile stock for medium to long term investment

Firstcall India Equity | Feb. 9, 2016, 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’s net profit stood at Rs. 85.57 mn, an increase of 28.76% in Q1 FY16 against Rs. 66.46 mn in the corresponding quarter of the previous year.

- The company has achieved a turnover of Rs. 2472.78 mn, an increase of 13.89% year –on – year for the 1st quarter of the FY2015-16 as against Rs. 2171.12 mn in the corresponding quarter of the previous year.

- In Q1 FY16, EBITDA was at Rs. 315.77 mn as compared to Rs. 245.90 mn in the Q1 FY15, an increase of 28.42%.

- Profit before tax (PBT) at Rs. 107.03 mn in Q1 FY16 compared to Rs. 84.08 mn in Q1 FY15, registered a growth of 27.29%.

- The company has reported an EPS of Rs. 4.27 for the 1st quarter as against an EPS of Rs. 3.31 in the corresponding quarter of the previous year.

- Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 26% over 2014 to 2017E respectively.

Outlook & Conclusion:At the current market price of Rs. 170.00, the stock P/E ratio is at 11.19 x FY16E and 10.13 x FY17E respectively.

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.195.00 for Medium to Long term investment.

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