Firstcall recommend a paper & paper-products scrip for medium-term investmens

Firstcall India Equity | March 18, 2016, midnight


OUTLOOK AND CONCLUSION


- At the current market price of Rs. 247.00, the stock P/E ratio is at 14.20 x FY16E and 11.92 x F Y17E respectively.


- Earning per share (EPS) of the company for the earnings for F Y16E and FY17E is seen at Rs. 17.39 and Rs. 20.72 respectively.


- Net Sales and PAT of the company are expected to grow at a CAGR of 5% and 6% over 2014 to 2017E respectively.


- On the basis of EV/EBITDA, the stock trades at 6.29 x for F Y16E and 5.87 X for F Y17E.


- Price to Book Value of the stock is expected to be at 0.75 x and 0.71 x for F Y16E and F Y17E respectively.


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


SYNOPSIS


- Seshasayee Paper and Boards Limited (SPB), the flagship company belonging to 'ESVIN GROUP', operates an integrated pulp, paper and paper board.


- During Q3 FY16, net profit jumps to Rs. 41.30 mn against Rs. 26.50 mn in the corresponding quarter ending of previous year, an increase of 55.85%.


- Revenue for the quarter stood to Rs. 2252.40 mn from Rs. 2595.70 mn, when compared with the prior year period.


- During Q3 FY16, EBIDTA is Rs. 216.10 mn as against Rs. 206.90 mn in the corresponding period of the previous year.


- EPS of the company stood at Rs. 3.28 a share during the quarter, registering 55.85% increase over previous year period.


- Revenue for the 9M FY16 stood to Rs. 6937.60 million from Rs. 7044.50 million, when compared with the prior year period.


- During 9M FY16, the company’s net profit stood at Rs. 167.10 million as against Rs. 145.50 million in 9M FY15, grew by 14.85%.


- For the December quarter of FY16, Other Income was at Rs. 9.50 million as compared to Rs. 2.00 million for December quarter of FY15.


- Net Sales and PAT of the company are expected to grow at a CAGR of 5% and 6% over 2014 to 2017E respectively.

 

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