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Hold MIC Electronics: PINC
PINC Research has recommended a hold rating on MIC Electronics. MIC Electronics Ltd.’s (MIC) results were significantly better than research firm's expectations as it capitalised on the sustained tilt in sales mix towards high margin media business while also benefiting from softening raw material prices.
PINC Research has recommended a hold rating on MIC Electronics in its May 9, 2008 research report. "MIC Electronics Ltd.'s (MIC) results were significantly better than expectations as it capitalised on the sustained tilt in sales mix towards high margin media business while also benefiting from softening raw material prices. Consolidated net sales rose 21.4% YoY to Rs 919 million in Q3FY08 while OPM expanded to 27.3% (vs 7.4% in Q3FY07), which led to 663% jump in net profits to Rs 202 million."
"At the CMP of Rs 905, the stock is trading at a P/E of 15.1x and EV/ EBIDTA of 10.4x FY10E consolidated earnings. The media segment has been exhibiting significant traction. Further, other initiatives like rentals and LED lighting on a BOT model are at the cusp of scaling up, imparting visibility to MIC's earnings. However, the company is still exposed to implementation risks and rich valuations do not offer any scope to absorb any earning glitches. Hence, we recommend a 'HOLD' and will review the same as we gain greater clarity on the progress of the various business segments," says PINC's research report.
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