Hold VST Industries: PPFAS

2562 Investors following VST. Share this News with them.

0

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

Hold VST Industries: PPFAS

Parag Parikh Financial Advisory Services (PPFAS) has recommended hold rating on VST Industries, in its January 20, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy Shree Cements; target of Rs 2636: Motilal Oswal Buy Praj Industries; target of Rs 92: KRChoksey Buy TTK Prestige; target of Rs 2681: Firstcall Research ALSO READ See previous views by Parag Parikh Financial Advisory Services See what other Experts & Brokerages are saying about VST See messages about VST VST BSE | NSE 01/06/12 Are Mutual Funds betting on VST?

Parag Parikh Financial Advisory Services (PPFAS) has recommended hold rating on VST Industries , in its January 20, 2012 research report.

"VST Industries Ltd.(VST) came out with another strong set of numbers for the quarter ended December 2011. On a quarterly y-o-y basis, Net Sales went up by 26%, from Rs 1,374.4 Mn to Rs 1,729.1 Mn. Total Expenditure went up by 18% to Rs 1,145.9 Mn. This was primarily due to lower Cost of Materials (as a % of Sales) and almost flat Staff costs. Operating margins as a result expanded to 33.7%. PAT stood at Rs 379.7 Mn against Rs 260.7 Mn in the period a year ago, a rise of 46%. EPS for the quarter was Rs 24.6."

"At the CMP of Rs 1,246.5, the stock trades at a PE (TTM) of 14.5 times. Part of the reason for this phenomenal sales growth in the last few quarters has been a price increase taken for one of the Company's dominant brands. Such growth may not be seen further on due to the base effect coming in. Nevertheless the Company stands in good stead. Given the focused nature of the Company to keep operating in the same business (and not diversify), generates a lot of cash. Most of this cash is distributed as dividends every year. For investors, who invested at lower price levels, this high dividend implies a high yield on investment too. Given the stable nature of the business, there is good visibility for this yield to continue and even increase over the years as the Company keeps growing. Valuations seem reasonable. We continue to recommend a 'Hold'," says Parag Parikh Financial Advisory Services research report.

Shares held by Mutual Funds/UTI

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