GMM Pfaudler Q3FY17: Firstcall are overweight for medium to long term investment

Firstcall India Equity | May 24, 2016, midnight


SYNOPSIS

  • GMM Pfaudler Ltd (GMMP) is a leading supplier of process equipment to the pharmaceutical and chemical industries.
  • During Q3 FY17, Total Operating revenue was Rs. 666.39 mn as compared to Rs. 605.29 mn during Q3FY16, up by 10.09%.
  • During the quarter, EBITDA stood at Rs. 111.84 Mn as compared to Rs. 95.66 Mn during Q3FY16, an increase of 16.91%.
  • EBITDA Margin at 17% for Q3FY17 as against 16% in Q3FY16.
  • Net profit stood at Rs. 58.32 mn for Q3FY17 as compared to Rs. 50.91 mn in Q3FY16, an increase of 14.56%.
  • Basic EPS stood at Rs. 3.99 as against Rs. 3.48 in Q3FY16.
  • GMM Pfaudler Ltd has declared third Interim Dividend @ Rs. 0.70 per share of Rs. 2/- each for the year 2016-17.
  • During 9 months period FY17, Operating revenue was Rs. 1868.56 mn as compared to Rs. 1699.48 mn during the corresponding period of previous year, up by 9.95%.
  • During nine months period F Y17, PAT increased by 36.88% to Rs. 172.10 mn from Rs. 125.73 mn in the corresponding period of the previous year.
  • Net sales and PAT of the company are expected to grow at a CAGR of 9% and 17% over 2015 to 2018E respectively.


OUTLOOK AND CONCLUSION

  • At the current market price of Rs.514.10, the stock P/E ratio is at 31.94 x FY17E and 28.40 x FY18E respectively.
  • Earning per share (EPS) of the company for the earnings for FY17E and FY18E is seen at Rs. 16.10 and Rs. 18.10 respectively.
  • Net Sales and PAT of the company are expected to grow at a CAGR of 9% and 17% over 2015 to 2018E respectively.
  • On the basis of EV/EBITDA, the stock trades at 15.97 x for FY17E and 14.14 x for FY18E.
  • Price to Book Value of the stock is expected to be at 4.56 x and 3.93 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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