Bhartiya International Q2FY17: Firstcall are overweight for medium to long term investment

Firstcall India Equity | May 10, 2016, midnight


SYNOPSIS:

  • Bhartiya International Ltd has been India's largest exporter of leather apparel for more than fifteen years.

  • The company achieved a turnover of Rs. 1364.15 mn for the 2nd quarter of the FY 2016-17 as against Rs. 1402.78 mn in the corresponding quarter of the previous year.

  • During the 2nd quarter, net profit increased by 5.03% to Rs. 62.07 mn from Rs. 59.10 mn in the corresponding quarter ending of previous year.

  • During the quarter, EBIDTA stood at Rs. 139.40 mn as against Rs. 125.80 mn in the corresponding period of the previous year, up by 10.81%.

  • Profit before tax (PBT) increased by 3.75% to Rs.90.57 mn in Q2 FY17 from Rs. 87.30 mn in the corresponding quarter of the previous year.

  • EPS of the company stood at Rs. 5.30 in Q2 FY17 against Rs. 5.27 in the corresponding quarter of the previous year.

  • In H1 FY17, Net sales stood at Rs. 2347.79 mn as compared to Rs. 2284.89 mn in H1 FY16.

  • For six month period of FY17, net profit stood at Rs. 93.77 mn as against Rs. 89.05 mn for the Six month ended of previous financial year.

  • Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 21% over 2015 to 2018E, respectively.

 

OUTLOOK AND CONCLUSION:

  • At the current market price of Rs. 487.00, the stock P/E ratio is at 32.32 x FY17E and 28.71 x FY18E respectively.

  • Earning per share (EPS) of the company for the earnings for FY17E and FY18E is seen at Rs. 15.07 and Rs. 16.96 respectively.

  • Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 21% over 2015 to 2018E respectively.

  • On the basis of EV/EBITDA, the stock trades at 18.18 X for FY17E and 16.98 X for FY18E.

  • Price to Book Value of the stock is expected to be at 2.78 x and 2.53 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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