Kirloskar Oil Engines Q3FY17: Fundamental Analysis - Firstcall India Equity

Firstcall India Equity | May 24, 2016, midnight


SYNOPSIS

  • Incorporated in 1946, Kirloskar Oil Engines Limited (KOEL) is the flagship company of the Kirloskar group.
  • Revenue for the 3rd quarter stood at Rs. 6894.50 mn against Rs. 6501.50 mn, when compared with the prior year period, up by 6.04%.
  • For the quarter ended Q3 FY17, EBITDA was Rs. 755.00 mn as against Rs. 773.80 mn in the corresponding period of the previous year.
  • During Q3 FY17, the company’s net profit stood at Rs. 280.70 mn as against Rs. 287.90 mn in the corresponding quarter ending of previous year.
  • EPS of the company stood at Rs. 1.94 during the quarter, as against Rs. 1.99 per share over previous year period.
  • For the nine months ended December 31, 2016, Net Sales was Rs. 20682.20 mn as compared to Rs. 18666.70 mn in the corresponding period of last year, up by 10.80%.
  • During 9M F Y17, Net Profit increased by 21.01% to Rs. 1294.00 mn from Rs. 1069.30 mn in nine months ended 31St December 2015.
  • Net Sales and Operating Profit of the company are expected to grow at a CAGR of 7% and 5% over 2015 to 2018E respectively.


OUTLOOK AND CONCLUSION

  • At the current market price of Rs. 390.40, the stock P/E ratio is at 31.44 x FY17E and 27.81 x FY18E respectively.
  • Earning per share (EPS) of the company for the earnings for FY17E and FY18E is seen at Rs. 12.42 and Rs. 14.04 respectively.
  • Net Sales and Operating Profit of the company are expected to grow at a CAGR of 7% and 5% over 2015 to 2018E respectively.
  • On the basis of EV/EBITDA, the stock trades at 14.77 x for FY17E and 13.78 x for FY18E.
  • Price to Book Value of the stock is expected to be at 3.48 x and 3.09 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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