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Mar 22, 2013, 11.39 AM IST | Source: Moneycontrol.com

Buy Dhanuka Agritech; target Rs 134: Firstcall Research

Firstcall Research is bullish on Dhanuka Agritech and has recommended buy rating on the stock with a target price of Rs 134 in its March 20, 2013 research report.

Firstcall Research is bullish on Dhanuka Agritech and has recommended buy rating on the stock with a target price of Rs 134 in its March 20, 2013 research report.

"Dhanuka Agritech is engaged in the businesses of Agro-Chemicals & Seeds under Dhanuka Agritech Ltd and Pharmaceutical Ingredients under Dhanuka Laboratories Ltd. The company's net sales registered a 26.37 percent increase and stood at a record Rs. 1397.13 million from Rs. 1105.62 million over the corresponding quarter last year. The company's net profit registered a 49.03 percent increase and stood at a record Rs. 116.81 million from Rs. 78.38 million over the corresponding quarter last year. The company has reported an EPS of Rs. 2.34 for Q3FY13 as against an EPS of Rs. 1.57 in the corresponding quarter of the previous year. Dhanuka Agritech Ltd has approved the payment of Interim Dividend to the shareholders @ 75 percent (Rs. 1.50/- per Equity Share having Face Value of Rs. 2/- each), for the FY2012-13. Dhanuka launches 4 new products "Brigade 8 percentSC" & "Bombard" is Insecticides, "Vitavax Ultra" is Fungicide & “Wetcit" is Surfactant, in technical association with African company. Net Sales & PAT of the company are expected to grow at a CAGR of 11 percent and 11 percent over 2011 to 2014E respectively.

The company's net profit jumps to Rs.116.81 million against Rs.78.38 million in the corresponding quarter ending of previous year, an increase of 49.03 percent. Revenue for the quarter rose 26.37 percent to Rs.1397.13 million from Rs.1105.62 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.2.34 a share during the quarter, registering 49.03 percent increase over previous year period. Profit before interest, depreciation and tax is Rs.163.31 millions as against Rs.127.66 millions in the corresponding period of the previous year.

Outlook and Conclusion: At the current market price of Rs.118.40, the stock P/E ratio is at 9.22 x FY13E and 8.38 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.12.84 and Rs.14.13 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 11 percent and 11 percent over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 7.07 x for FY13E and 6.43 x for FY14E. Price to Book Value of the stock is expected to be at 2.23 x and 1.81 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 134 for Medium to Long term investment," says Firstcall Research report.

Institutional holding more than 40% in Indian cos

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