Huhtamaki PPL Q3CY16: Fundamental Analysis - Firstcall India Equity

Firstcall India Equity | May 12, 2016, midnight


SYNOPSIS

  • Huhtamaki PPL Ltd (HPPL) is a part of Huhtamaki Oyj, Finland and is known for packaging since the company was founded in 1935.
  • The company’s net profit stood at Rs. 167.90 mn against Rs. 159.70 mn in the corresponding quarter ending of previous year, an increase of 5.13%.
  • Revenue for the quarter rose by 6.76% to Rs. 5574.70 mn from Rs. 5221.90 mn, when compared with the prior year period.
  • During the quarter, EBIDTA is Rs. 599.40 mn as against Rs. 553.30 mn in the corresponding period of the previous year, up by 8.33%.
  • During Q3 CY16, Profit before tax up by 38.26% to Rs. 290.90 mn from Rs. 210.40 mn in Q3 CY15.
  • EPS of the company stood at Rs. 2.31 a share during the quarter, as against Rs. 2.20 over previous year period.
  • Huhtamaki PPL Ltd is setting up a new Flexible Packaging manufacturing unit in Assam which is likely to be commissioned during the first half of 2017.
  • During 9M CY16, Net sales up by 9.66% to Rs. 16552.60 mn from Rs. 15093.90 mn in 9M CY15.
  • During the nine months ended 2016, net profit was increased by 23% to Rs. 693.30 mn from Rs. 563.70 mn over the nine months ended 2015.
  • Net Sales PAT of the company are expected to grow at a CAGR of 23% and 17% over 2014 to 2017E, respectively.


OUTLOOK AND CONCLUSION

  • At the current market price of Rs.234.10, the stock P/E ratio is at 19.16 x CY16E and 16.08 X CY17E respectively.
  • Earning per share (EPS) of the company for the earnings for CY16E and CY17E is seen at Rs. 12.22 and Rs. 14.56 respectively.
  • Net Sales and PAT of the company are expected to grow at a CAGR of 23% and 17% over 2014 to 2017E, respectively.
  • On the basis of EV/EBITDA, the stock trades at 7.13 x for CY16E and 6.36 x for CY17E.
  • Price to Book Value of the stock is expected to be at 2.42 x and 2.10 x for CY16E and CY17E respectively.
  • Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

 

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