Buy Trident; target of Rs 81: Cholamandalam securities

Cholamandalam securities' research report on Trident

Trident’s revenue grew by 24.2%YoY to INR 13.9bn; Textile revenue grew by 24.6% YoY to INR 11.4bn, aided by strong growth in the home textile segment and Paper revenue grew 22% YoY to INR 2.48bn. Bed linen revenue grew 44% YoY, aided by 32.5% YoY increase in volume and 11.5% YoY increase in realization. Bath linen grew 30% YoY, while realization was stable. Captive consumption of yarn stood at 42% in 2QFY19.

Outlook

At CMP, Trident is trading at 9.3X & 7.8X FY19E & FY20E earnings and we maintain a BUY rating, with a target price of INR 81 valuing the company at 10X FY20E EPS, representing an upside potential of 27.6%.