Rajesh Exports Q2FY17: Fundamental Analysis - Firstcall India Equity

Firstcall India Equity | May 10, 2016, midnight


SYNOPSIS:

  • Rajesh Exports Ltd (REL) is a zero debt company on standalone basis, with its undivided focus and expertise, the company is currently the largest constituent of gold business in the world.

  • Consolidated revenue for the quarter rose by 45.44% to Rs. 644589.37 mn from Rs. 443196.50 mn, when compared with the prior year period.

  • During Q2 FY17, consolidated EBIDTA is Rs.4347.77 mn as against Rs. 4722.66 mn in the corresponding period of the previous year.

  • During Q2 FY17, consolidated Profit before tax grew 12.85% at Rs. 3220.34 mn against Rs. 2853.65 mn in Q2 FY16.

  • During the quarter, consolidated net profit jumps to Rs. 3097.15 mn from Rs. 2798.38 mn in the corresponding quarter ending of previous year, an increase of 10.68%.

  • EPS of the company stood at Rs. 10.49 during the quarter, as against Rs. 9.48 per share over previous year period.

  • On November 02, 2016, the company won an order worth Rs. 12 bn from the UAE to export designer range gold and diamond studded jewelry and medallions.

  • The company’s Net sales stood at Rs. 1233757.01 mn for six months end of FY17 as compared to Rs.594639.06 mn for six months end of F Y16.

  • For the end of 6M FY17, Net Profit grew by 12.11% at Rs. 5796.23 mn as compared to Rs. 5170.00 mn for the end of 6M FY16.

  • Net Sales and PAT of the company are expected to grow at a CAGR of 78% and 41% over 2015 to 2018E respectively.

 

OUTLOOK AND CONCLUSION:

  • At the current market price of Rs.457.15, the stock P/E ratio is at 11.23 x F Y17E and 9.59 X FY18E respectively.

  • Earning per share (EPS) of the company for the earnings for F Y17E and FY18E is seen at Rs. 40.72 and Rs. 47.69 respectively.

  • Net Sales and PAT of the company are expected to grow at a CAGR of 78% and 41% over 2015 to 2018E respectively.

  • On the basis of EV/EBITDA, the stock trades at 2.80 x for F Y17E and 1.83 X for F Y18E.

  • Price to Book Value of the stock is expected to be at 2.37 x and 1.90 x for F Y17E and F Y18E respectively.

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

 

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