Skip to main content

Maintain buy on Eveready with 15% upside; LED, appliances to propel growth: MOST

Motilal Oswal has maintained a buy on Eveready Industries with a target price of Rs 358, an upside of 15 percent and sees growth acceleration led by LED and appliances.

Eveready Industries on Monday reported 39.36 percent decline in standalone net profit to Rs 13.56 crore for the first quarter ended June 30, hit by de-stocking in trade channels ahead of GST implementation. Revenue from operations during the period under review were at Rs 357.66 crore as against Rs 371.79 crore in the same period last fiscal, down 3.8 percent.

Research and broking firm, Motilal Oswal has maintained a buy on the stock with a target price of Rs 358, an upside of 15 percent from the current level. In the quarter gone by, Eveready's revenue was in line while earnings before interest, taxes, depreciation and amortization (EBITDA) and profit after tax was below estimates. The company reported overall revenue of Rs 357,7 crore (estimate of Rs 345.7 crore) in Q1 FY'18 against Rs 371.8 crore in Q1 FY'17, marking de-growth of 3.8 percent, mainly due to a significant drop of 10 percent YoY in battery volumes and 8 percent in flashlight turnover. STOCK FREE TIPS

Motilal Oswwal believes that growth will accelerate backed by LED and appliances. Its appliances segment’s revenues grew strongly by 257 percent YoY to Rs 18 crore in Q1 FY'18. The company’s expectation of turnover of Rs 100 crore in FY'18 from the segment would allow it to capture 1 percent of the market share, and thus, capitalise on the significant opportunity to grow. LED products too witnessed robust turnover growth of 179 percent YoY to Rs 50.3 crore, keeping growth in lighting flattish (inspite of de-growth in CFL), with EBITDA margin of 7 percent. With the GST transitional phase almost over, demand is expected to pick up, also helped by early festive season and good monsoon.

Eveready Industries is expected to reap the benefits of robust growth in LED and appliances, along with the batteries and flashlight segments recovering from GST turbulence. Motilal Oswal has maintained its earnings estimates, with revenue/PAT compound annual growth rate (CAGR) of 10 percent/13 percent over FY'17-19E. and values the stock at 22x FY'19E earnings per share (EPS).

At 10:40 hrs Eveready Industries India was quoting at Rs 302.00, down Rs 8.00, or 2.58 percent. It has touched an intraday high of Rs 311.55 and an intraday low of Rs 300.50.
www.shristocktips.com

Comments

Popular posts from this blog

Market Update: PSU bank index outperforms as PNB, Syndicate Bank jump 2-5%; JP Associates zooms 11%

The market breadth was in favour of the advances with 957 stocks advancing while 668 declined and 383 remained unchanged. On the other hand, in the BSE, 1176 stocks advanced and 888 declined and 108 remained unchanged.

The Indian markets on Friday morning were trading flat with the Nifty shedding 51 points or 0.49 percent  while the Sensex was down 178 points.

The Nifty PSU banking index was up 0.6 percent led by stocks like Syndicate Bank which jumped 5 percent followed by Allahabad Bank which gained over 3 percent. IDBI Bank and OBC were the other gainers. PNB gained 2.38 percent.

The top Nifty gainers included Mahindra & Mahindra and Aurobindo Pharma which were up 1.7 percent each followed by UPL, Yes Bank and Zee Entertainment.

The top Nifty losers included IOC and BPCL which fell 2 percent each followed by HPCL, Tata Motors and NTPC.

The most active Nifty stocks included IDBI bank which jumped over 3 percent while JP Associates zoomed over 10 percent after Rakesh Jhunjhunwala…

HDFC Sec retains sell on Bharti Infratel, reduces target to Rs 310 despite 22% fall in last 2 months

The share price has declined from a peak of Rs 480 to Rs 373 (22 percent) in last two months.

Bharti Infratel shares declined 1.5 percent to close at Rs 368 on Tuesday after HDFC Securities has reiterated its Sell rating on the stock with revised target price at Rs 310 (from Rs 387 per share) despite sharp fall in last two months. INDIAN STOCK TIPS

The share price has declined from a peak of Rs 480 to Rs 373 (22 percent) in last two months.

"Target price is based on 20x Dec-19E EPS (Rs 356) for business as usual (versus 24x earlier) less impact of Rs 60 per share from Vodafone-Idea merger (versus Rs 39 per share earlier) and likely acquisition of Vodafone-Idea stake in Indus at enterprise value of Rs 50 lakh per tower (+Rs 15 per share)," the research house said.

It further said the key reason for the de-rating is instant loss of tenancies on merger of Vodafone-Idea and impact of Reliance Communications and Aircel businesses’ scaling down.

This would push back Bharti Infrat…

Nifty could slip towards 9,900; 3 stocks which could give up to 11% return

A close beyond 10,400 levels with healthy volumes can pause the current bearishness triggering a short covering to levels of 10,640-10,730.

The Nifty index Futures continued to slide lower for the second month in a row making it 10 percent decline from the record highs. Further, it has broken down from a broadening wedge pattern along with a close below the 200-DMA, affirming weakness dominant in the markets at the moment.

A sustained trade below 10,050 can accelerate the fall to levels of 9,930-9,700. However, a close beyond 10,400 levels with healthy volumes can pause the current bearishness triggering a short covering to levels of 10,640-10,730.

Moreover, the relative strength index or the RSI has turned down from the neutral levels of 50 on two occasions in recent pullbacks suggesting further weakness in the coming trading sessions.

Here is the list of stocks which can give up to 11 percent return:

Arvind Ltd: SELL| Target Rs345| Stop Loss Rs410| Return 11%

On the weekly chart, Arv…