CRISIL assigns valuation grade of 4/5 to Everest Kanto

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CRISIL assigns valuation grade of 4/5 to Everest Kanto

CRISIL Research has come out with its report on Everest Kanto Cylinder. The research firm has initiated coverage on the company with a Valuation Grade of ‘4/5’ and fundamental grade of 3/5 , in its July 31, 2011 report.

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Everest Kanto BSE | NSE 31/05/12 Are Mutual Funds betting on Everest Kanto?

CRISIL Research has come out with its report on Everest Kanto Cylinder . The research firm has initiated coverage on the company with a Valuation Grade of '4/5' and fundamental grade of 3/5 , in its July 31, 2011 report.

Everest Kanto Cylinder's (Everest Kanto's) Q1FY12 revenues and profitability were in line with CRISIL Research's estimates driven by growth across domestic and international markets. Post our interaction with the management, we could revisit our estimates and fair value. We maintain the fundamental grade of 3/5.

Q1FY12 result analysis
• Revenues grew by 54.3% y-o-y to Rs 2,143 mn. The company recorded strong growth in both domestic as well as international revenues.

• EBITDA registered a strong growth of almost 6 times y-o-y to Rs 478 mn led by higher sales and improved EBITDA margin (22.3% in Q1FY12 vis-à-vis 6.1% in Q1FY11.

• The company was back in the black with a PAT margin of 13.6% and PAT of Rs 290 mn. In Q1FY11, the company had made a loss of Rs 114 mn mainly because of a forex loss of Rs 112 mn.

Valuations: Current market price has upside
We continue to use the discounted cash flow method to value Everest Kanto. At the current market price of Rs 90, our valuation grade is 4/5, says CRISIL Research report.

Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report.  The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.

© CRISIL Limited . All Rights Reserved. Published under permission from CRISIL"

To read the full report click on the attachment