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Butterfly Gandhimathi shares surge 19% to hit all-time high; ICICI Direct raises target price

The smallcap company which deals in household appliances reported strong revenue and improved profitability for the March quarter of the financial year 2021, aided by favourable base.

May 24, 2021 / 10:51 AM IST
 
 
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Shares of Butterfly Gandhimathi Appliances surged more than 19 percent to hit their fresh all-time high of Rs 923.85 on BSE in morning trade on BSE on May 24.

The smallcap company which deals in household appliances reported strong revenue and improved profitability for the March quarter of the financial year 2021, aided by favourable base.

As pointed out by the brokerage firm ICICI Direct, the company's revenues in Q4FY21 grew 86 percent year-on-year (YoY) to Rs 207 crore with a PAT of Rs 8.9 crore against a net loss of Rs 7.7 crore in Q4FY20.

"The healthy growth was due to enhanced customer interest in kitchen appliances due to accentuated preference for home-cooked food," said ICICI Direct.

"Revenue growth was visible across all channels except gas dealers. Though gross margins fell 340 bps YoY to 41 percent owing to higher input cost and change in product/channel mix, EBITDA margin was at 6.6 percent and EBITDA at Rs 13.6 crore (Q4FY20: EBITDA loss of Rs 4.5 crore)," ICICI Direct pointed out.

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The brokerage firm has a buy call on the stock and raised the 12-15 months target price to Rs 1,000 from Rs 750.

The brokerage firm underscored that the company is planning a capex of Rs 30 crore to enhance the plant capacity. The new capex would enable it to have a peak revenue potential of about Rs 1,400 crore over the next few years.

"Factoring in the strong performance in FY21, we model revenue CAGR of 17 percent in FY20-23E. We expect improvement in margin profile (operating leverage) and expect EBITDA margins to increase to 11 percent by FY23E," ICICI Direct said.

The stock traded 6.17 percent higher at Rs 822.75 on BSE at 1030 hours.

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Moneycontrol News
first published: May 24, 2021 10:51 am

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