Buy Berger Paints; target Rs 124: Dolat Capital

7075 Investors following Berger Paints. Share this News with them.

0

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

Buy Berger Paints; target Rs 124: Dolat Capital

Dolat Capital is bullish on Berger Paints and has recommended buy rating on the stock with a target price of Rs 124 in its February 3, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy BF Utilities; target of Rs 429: IIFL Buy Hexaware Tech; target of Rs 125: PINC Research Accumulate Ashok Leyland; target Rs 30: PINC Research ALSO READ See previous views by Dolat Capital See what other Experts & Brokerages are saying about Berger Paints See messages about Berger Paints Berger Paints BSE | NSE 01/06/12 Are Mutual Funds betting on Berger Paints?

Dolat Capital is bullish on Berger Paints and has recommended buy rating on the stock with a target price of Rs 124 in its February 3, 2012 research report.

"Berger Paints reported a consolidated revenue growth of 26% to Rs 7.8bn. EBITDA at Rs 789mn was up 15.7% YoY as margins decline by 90bps to 10.1%. PAT at Rs 491mn was up 11.9% YoY. While domestic business report strong growth, poor operating performance in International business (10% of revenue) impact overall profitability. Domestic business grew by 27.5% to Rs 7bn (we estimate 14-15% volume growth). The volume growth has been significantly higher than our estimate of 10%. Rupee depreciation impacted Gross margins down 93bps YoY to 34.8%. However, lower growth in employee cost down 53bps YoY restricted a fall in EBITDA margin to 44bps YoY at 9.8%. EBITDA at Rs 685mn was up 22% YoY. PAT at Rs 449mn was up 21.7% YoY."

"We believe expected price hike in Industrial segment coupled with appreciation in rupee will improve the operating performance in Q4FY12. Subsidiaries & JV business grew by 16% YoY to Rs 812mn. EBITDA was up down 13.3% YoY to Rs 104mn largely on account of higher other exp (up 454bps YoY, due to higher advertising spend) We continue to remain positive on Berger Paints as company plans to expand its presence in the high margin water based paints. The company has been reporting better volume growth and operating performance when compared with its peers. Further, it has witnessed an improvement in market share. The stock trades at 19.6x FY12E EPS of Rs 5.2 and 16.2x FY13E EPS of Rs 6.2. We are introducing FY14 and estimate an EPS of Rs 7.5. We recommend a BUY with a price target of Rs 124," says Dolat Capital research report.

Non-Institutions holding more than 90% in Indian cos

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.

To read the full report click on the attachment