Buy La Opala: The future for kitchenware retailing holds immense potential

Firstcall India Equity | March 1, 2016, midnight


- La Opala RG Limited was established in the year 1987 in India. The Company is engaged in the manufacture and marketing of opal glass tableware and 24% lead crystalware products within and outside India.

- Net profit of the company rose by 45.53% y-o-y at Rs. 202.19 million in Q3 FY16 compared to Rs. 138.93 million in Q3 FY15.

- During the quarter, net sales registered 27.44% increase and stood at Rs. 804.83 million against Rs. 631.56 million in the corresponding quarter last year. In Q3 FY16, EBITDA has increased by 39.95% at Rs. 292.99 million from Rs. 209.35 million in the corresponding quarter of previous year.

- Profit before tax (PBT) at Rs. 268.02 million in Q3 FY16 compared to Rs. 184.89 million in Q3 FY15, registered a growth of 44.96% y-o-y.

- During the quarter, Other income increased by 113.51% y-o-y at Rs. 3.16 million as against Rs. 1.48 million in the corresponding quarter of the previous year.

- Net sales for the nine moths ended of FY16 stood at Rs. 1954.07 million, rose by 20.63% as compared to Rs. 1619.89 million for the nine months ended of FY15.

- In 9M FY16, the company’s net profit grew by 43.11% of Rs. 444.96 million as compared to Rs. 310.92 million in 9M FY15.

- Net Sales and PAT of the company are expected to grow at a CAGR of 19% and 34% over 2014 to 2017E respectively.

At the current market price of Rs. 600.60, the stock P/E ratio is at 55.09 x FY16E and 45.86 X FY17E respectively. Price to Book Value ofthe stock is expected to be at 13.99 x and 11.34 X respectively for FY16E and FY17E.We recommend ‘BUY’ in this particular scrip with a target price of Rs.660.00 for Medium to Long term investment.

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