CRISIL retains valuation grade of 5/5 to Visaka Industries

1802 Investors following Visaka Ind. Share this News with them.

0

Like this story, share it with millions of investors on M3

CRISIL retains valuation grade of 5/5 to Visaka Industries

CRISIL Research has come out with its report on Visaka Industries. The research firm has maintained the fundamental grade of 3/5 to the company in its November 11, 2011 report.

Post your opinion here

 

0

Tweet

Share on Tumblr

Visaka Ind BSE | NSE 30/05/12 Are Mutual Funds betting on Visaka Ind?

CRISIL Research has come out with its report on Visaka Industries . The research firm has maintained the fundamental grade of 3/5 to the company in its November 11, 2011 report.

Visaka Industries Ltd's (Visaka's) Q2FY12 revenues were in line with CRISIL Research's expectations, but operating profitability was significantly lower than estimated. While we had anticipated some pressure on Asbestos Cement Sheet (ACS) realisations owing to competition from galvanised iron sheets and colour coated sheets, the extent of impact on EBITDA is surprising. At the PAT level, the performance has met expectations largely because the interest cost has been significantly lower than estimated. While this could have resulted from netting off of some income against financial charges, we are yet to get clarity on the same. We may revisit our estimates post our interaction with the management. However, we do remain positive on Visaka's growth prospects based on its dominant position as the second largest player in the ACS industry and its focus on rural India. We maintain our fundamental grade of 3/5.

Q2FY12 result analysis
• Visaka's Q2FY12 revenues increased by 12.7% y-o-y to Rs 1,510 mn mainly due to increase in revenues from the building product segment (76% of revenues, includes mainly ACS) where it registered 14.9% y-o-y growth to Rs 1,152 mn. Revenue growth from the synthetic yarn segment was lower at 3.5% to Rs 344 mn

• EBITDA margin fell by 478 bps to 6.1%, partly due to higher raw material cost and partly due to higher other expenses. Consequently, EBITDA declined 37% to Rs 92 mn

• Lower operating profitability weighed heavily on PAT, which declined to Rs 22 mn from Rs 68 mn in Q2FY11. Accordingly, EPS was Rs 1.4 vis-a-vis Rs 4.3 in Q2FY11

Valuation: Current market price has strong upside
We continue to use the discounted cash flow method to value Visaka and maintain the fair value of Rs 118 per share. At the current market price of Rs 87, we retain the valuation grade of 5/5.

To read the full report click on the attachment

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"