February 22, 2017 / 11:45 IST
MTEP’s revenue stood at Rs 677mn, flat yoy and down 20% qoq (below estimate by 5%), due to 14% yoy decline in paint volume, while FMCG volume increased by 30% yoy, mainly due to a lower base and new clients addition. Overall volumes declined yoy by 2% to 4, 140tn, while EBITDA stood at Rs 102mn, down 12/20% yoy/qoq due to higher staff cost (up 9% yoy) and other expenses (up 9% yoy).
Outlook
Apart from the quarter’s hiccups due to demonetisation, our expectation on MTEP’s volume growth of 15-20% for the next few quarters remains strong. Management’s strong volume guidance of 15-18% for FY17/18, increased business from IML and high-margin (20-22%) FMCG/food segment reiterate our positive view on MTEP. We maintain an Accumulate rating, with a target price of Rs 245, valued at 17x average EPS for FY18e and FY19e.
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