Moneycontrol
Mar 01, 2017 01:23 PM IST | Source: Moneycontrol.com

Buy Vesuvius India; target of Rs 1378: Edelweiss

Edelweiss is bullish on Vesuvius India has recommended buy rating on the stock with a target price of Rs 1378 in its research report dated February 28, 2017.

Buy Vesuvius India; target of Rs 1378: Edelweiss

Edelweiss' report on Vesuvius India

Vesuvius India’s (VIL) Q4CY16 revenue growth of 13.9% belied estimates, on lower sales in December hit by DeMon and lower exports. EBITDA and PAT growth of 4.6% and 4.2% YoY, respectively, came below estimates impacted by the change in product mix, higher retirement expenses (due to changes in actuarial valuations) and one-off provision for entry tax for earlier years.

Outlook

With the company in a sweet spot we expect it to post strong sales and earnings CAGR of 15.4% and 20.8%, respectively, with 253bps RoCE expansion to 27.6% over CY16-18. Maintain ‘BUY’ with TP of INR 1,378 (22x CY18E EPS).

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