Mcleod Russel rises 3% on Nomura buy report

Mcleod Russel, the world's biggest tea grower, rose as much as 2.8 percent intraday on Monday as the research firm Nomura has recommended a buy rating on the stock with a target price of Rs 429.

"While in the short-term the stock may react negatively to weak third quarter numbers, one could use it as an opportunity to accumulate the stock as the outlook for tea prices in FY14 remains positive," Nomura explained.

Mcleod reported a very tepid set of numbers in the third quarter of financial year 2012-13. EBITDA and operational margins were a disappointment.

Profit after tax rose by 5 percent year-on-year to Rs 123 crore in October-December quarter while net sales grew by 11 percent to Rs 448 crore from Rs 405 crore during the same period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) went up by 2 percent YoY to Rs 136 crore in the thid quarter. However, EBITDA margin fell by 265 basis points YoY to 30.4 percent.

At 12:34 hours IST, shares rose 1.24 percent to Rs 346 on Bombay Stock Exchange.