Research and broking firm, ICICIdirect has come out with a report on Linc Pen and Plastics and has advised a hold on the stock with a target price of Rs 245 in the next 12 months, a gain of 5 percent from the current level.
The research firm expects sales to grow at a compound annual growth rate (CAGR) of 5.3 percent over FY17-19E with corresponding PAT CAGR of 11.1 percent CAGR over FY17-19E. ICICIdirect values the company at Rs 245 which is 17x P/E on FY19E, EPS of Rs 14.3.
Last quarter Linc Pen posted a muted performance, largely tracking a decline in exports (down 50 percent YoY) on account of currency appreciation and trade barriers in its key export markets. Domestic sales also came in lower on account of de-stocking ahead of the implementation of new indirect tax regime. Net sales in Q1FY18 were at Rs 67.5 crore, down 22.4 percent YoY while Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter came in at Rs 2.9 crore with corresponding EBITDA margins at 4.2 percent. Profit after Tax (PAT) in Q1FY18 was at Rs 0.5 crore.
According to ICICIdirect, the management commentary suggests a softer Q2FY18. However, growth may pick up in H2FY18 as repeat orders pour in from new export markets while demand stabilises in the domestic market. The company is hopeful of ending the year marginally positive.
At 10:47 hrs Linc Pen and Plastics was quoting at Rs 233.00, down Rs 1.85, or 0.79 percent. It has touched an intraday high of Rs 235.65 and an intraday low of Rs 230.00.
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