Moneycontrol
May 17, 2017 03:41 PM IST | Source: Moneycontrol.com

Hold Vardhman Textiles; target of Rs 1240: ICICI Direct

ICICI Direct recommended hold rating on Vardhman Textiles with a target price of Rs 1240 in its research report dated May 17, 2017.

Hold Vardhman Textiles; target of Rs 1240: ICICI Direct

ICICI Direct's research report on Vardhman Textiles


Vardhman reported strong margins of 24% for Q2FY17, Q3FY17 on account of benefits of low cost cotton inventory. However, due to depletion of low cost inventory, margins for the quarter fell 420 bps YoY to 17.1%. Average cotton prices (Shankar-6) rose 26% YoY in Q4FY17 resulting in an increase in input costs.


Outlook


We have revised our estimates downwards for FY18E and FY19E. We have a HOLD recommendation on the stock with a target price of Rs 1240, valuing the company at 5.5x FY19E EV/EBITDA.


For all recommendations, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Sections
Follow us on
Available On