La Opala RG Q3FY15: Buy for a target price of Rs440

Firstcall India Equity | Jan. 4, 2016, midnight

La Opala RG Limited was established in the year 1987 in India. The Company is engaged in the manufacture and marketing of opal glass tableware and 24% lead crystalware product within and outside India.


Net profit of the company rise by 25.91% y-o-y at Rs. 138.93 million in Q3 FY15 compared to Rs. 110.34 million in Q3 FY14.


During the quarter, net sales registered 10.83% increase and stood at a record Rs. 631.56 million against Rs. 569.85 million over the corresponding quarter last year.


In Q3 FY15, EBITDA has increased by 21.86% at Rs. 209.35 million from Rs. 171.79 million in the corresponding quarter of previous year.


Profit before tax (PBT) at Rs. 184.89 million in Q3 FY15 compared to Rs. 144.52 million in Q3 FY14, registered a growth of 27.93%.


For the nine months ended of FY15, the company registered a growth of 25.57% in Net sales to Rs. 1619.89 million from Rs. 1289.99 million for the nine months ended of FY14.


Net profit grew by 45.09% to Rs 310.92 million for 9M FY15 from Rs 214.29 million for the H1 FY14.


Net Sales and PAT of the company are expected to grow at a CAGR of 19% and 31% over 2013 to 2016E respectively.


Outlook and Conclusion


- At the current market price of Rs. 400.00, the stock P/E ratio is at 52.23 x FY15E and 43.60 x FY16E respectively.


- Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.7.66 and Rs.9.17 respectively.


- Net Sales and PAT of the company are expected to grow at a CAGR of 19% and 31% over 2013 to 2016E respectively.


- On the basis of EV/EBITDA, the stock trades at 31.93 x for FY15E and 26.41 x for FY16E.


- Price to Book Value of the stock is expected to be at 12.17 x and 9.49 x respectively for FY15E and FY16E.


- We recommend ‘BUY’ in this particular scrip with a target price of Rs.440.00 for Medium to Long term investment.

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