Pondy Oxides & Chemicals Q4FY17: Fundamental Research - Firstcall India Equity

Firstcall India Equity | May 26, 2016, midnight


SYNOPSIS

  • Pondy Oxides & Chemicals Limited is India’s largest leading secondary Lead producing company.
  • Revenue for the quarter stood at Rs. 2159.27 mn from Rs. 1413.27 mn, when compared with the prior year period, up by 52.79%.
  • During the quarter, EBIDTA is increased by 136.25% to Rs. 200.08 mn from Rs. 84.69 mn in the corresponding period of the previous year.
  • During Q4 FY17, net profit increased to Rs. 107.72 mn from Rs. 29.30 mn in the corresponding quarter of previous year, higher by 267.64%.
  • During Q4 FY17, Profit before tax stood at Rs. 168.74 mn as compared to Rs. 49.97 mn in Q4 FY16, up by 237.68%.
  • EPS of the company stood at Rs. 19.32 during the quarter, as against Rs. 5.25 per share over previous year period.
  • Pondy Oxides & Chemicals Ltd has recommended a dividend of 30% i.e., Rs. 3.00 per equity shares of Rs. 10/- each for the financial year 2016-17.
  • During year ended FY2016-17, Net Sales stood at Rs. 8174.57 mn from Rs. 5064.21 mn in the previous year, an increase of 61%.
  • Net Profit during year ended 31St March 2017 stood at Rs. 279.24 mn as compared to Rs. 101.27 mn in the year ended 31st March 2016, up by 176%.
  • Net Sales and PAT of the company are expected to grow at a CAGR of 34% and 57% over 2016 to 2019E respectively.


OUTLOOK AND CONCLUSION

  • At the current market price of Rs. 524.95, the stock P/E ratio is at 8.52 x FY18E and 7.14 x FY19E respectively.
  • Earning per share (EPS) of the company for the earnings for FY18E and FY19E is seen at Rs. 61.60 and Rs. 73.54 respectively.
  • Net Sales and PAT of the company are expected to grow at a CAGR of 34% and 57% over 2016 to 2019E respectively.
  • On the basis of EV/EBITDA, the stock trades at 5.74 x for FY18E and 4.96 x for FY19E.
  • Price to Book Value of the stock is expected to be at 3.04 x and 2.21 x for FY18E and FY19E respectively.
  • Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

 

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