Firstcall are 'overweight' in this paper and paper products scrip

Firstcall India Equity | March 23, 2016, midnight


SYNOPSIS


- TCPL Packaging Ltd is one of India’s largest manufacturers of folding cartons, and India’s largest standalone converter of paperboard.


- During Q3 FY16, the company’s net profit stood at Rs. 104.43 million against Rs. 91.26 million in the corresponding quarter ending of previous year, an increase of 14.43%.


- Revenue for the quarter rose by 15.24% to Rs. 1527.31 million as against Rs. 1325.30 million, when compared with the prior year period.


- EBITDA stood at Rs. 266.27 million as against Rs. 218.24 million in the corresponding period of the previous year, an increase of 22.01%.


- During the quarter, EBIDTA and PAT margins are stood at 17.43% and 6.84% respectively.


- During Q3 FY16, PBT up by 19.03% to Rs. 143.62 million from Rs. 120.66 million in Q3 FY15.


- EPS of the company stood at Rs. 12.00 a share during the quarter, as against Rs. 10.49 per share over previous year period.


- Revenue was Rs. 4348.64 million for 9M FY16 as compared to Rs. 3688.81 million in the 9M FY15, an increase of 17.89%.


- Net profit stood at Rs. 288.62 million for 9M FY16 as compared to Rs. 235.10 million in 9M FY15, an increase of 22.77%.


- Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 35% over 2014 to 2017E respectively.


OUTLOOK AND CONCLUSION


- At the current market price of Rs.534.00, the stock P/E ratio is at 11.91 x F Y16E and 10.41 X FY17E respectively.


- Earning per share (EPS) of the company for the earnings for F Y16E and F Y17E is seen at Rs. 44.85 and Rs. 51.30 respectively.


- Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 35% over 2014 to 2017B, respectively.


- On the basis of EV/EBITDA, the stock trades at 6.36 x for F Y16E and 5.71 X for FY17E.


- Price to Book Value of the stock is expected to be at 3.04 x and 2.35 x for FY16E and FY17E respectively.


- Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

 

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