Garware-Wall Ropes Q3FY17: Firstcall are overweight for medium to long term investment

Firstcall India Equity | May 23, 2016, midnight


SYNOPSIS

  • Garware-Wall Ropes Ltd is a leading player in Technical Textiles, specializing in providing customized solutions to the cordage and infrastructure industry worldwide.
  • Revenue for the 3rd quarter rose by 4.91% to Rs. 1947.16 million from Rs. 1856.00 million, when compared with the prior year period.
  • The company’s net profit jumps to Rs. 178.62 million in Q3 FY17 against Rs. 146.04 million in the corresponding quarter ending of previous year, an increase of 22.3 1%.
  • During the 3rd quarter, EBIDTA stood at Rs. 309.52 million as against Rs. 257.70 million in the corresponding period of the previous year, up by 20.1 1%.
  • Profit before tax (PBT) stood at Rs. 259.56 million in Q3 FY17 against Rs. 197.04 million in the corresponding quarter of the previous year, up by 31.73%.
  • EPS for Q3 FY17 is at Rs. 8.16; a growth of22.31% over Q3 FY16.
  • For the nine months ended December 31, 2016, Net Sales was Rs. 6522.31 mn as compared to Rs. 6392.15 mn in the corresponding period of last year.
  • During 9M F Y17, Net Profit increased by 42.70% to Rs. 636.36 mn from Rs. 445.95 mn in nine months ended 31st December 2015.
  • Net sales and PAT of the company are expected to grow at a CAGR of 8% and 37% over 2015 to 2018E respectively.


OUTLOOK AND CONCLUSION

  • At the current market price of Rs. 606.00, the stock P/E ratio is at 16.02 x FY17E and 14.18 x FY18E respectively.
  • Earning per share (EPS) of the company for the earnings for FY17E and FY18E is seen at Rs. 37.83 and Rs. 42.74 respectively.
  • Net sales and PAT of the company are expected to grow at a CAGR of 8% and 37% over 2015 to 2018E respectively.
  • On the basis of EV/EBITDA, the stock trades at 8.93 x for FY17E and 7.88 x for FY18E.
  • Price to Book Value of the stock is expected to be at 2.96 x and 2.45 x for FY17E and FY18E respectively.
  • Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

 

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