Buy Apcotex Industries; target Rs 235: Firstcall Research

Firstcall Research is bullish on Apcotex Industries and has recommended buy rating on the stock with a target price of Rs 235 in its April 03, 2013 research report.

"Apcotex Industries is one of the leading producers of Performance Emulsion Polymers in India. The company’s net sales registered a 1.86 percent increase and stood at a record Rs. 609.77 million from Rs. 598.61 million over the corresponding quarter last year. The company’s net profit registered a 30.98 percent increase and stood at a record Rs. 33.40 million from Rs. 25.50 million over the corresponding quarter last year. The company has reported an EPS of Rs. 6.39 for the 3rd quarter as against an EPS of Rs. 4.88 in the corresponding quarter of the previous year. Apcotex was awarded the Total Productive Maintenance (TPM) Excellence Award Category A in 2012 by the Japan Institute of Plant Maintenance (JIPM). Net Sales and PAT of the company are expected to grow at a CAGR of 12 percent & 10 percent over 2011 to 2014E respectively.

The company’s net profit jumps to Rs.33.40 million against Rs.25.50 million in the corresponding quarter ending of previous year, an increase of 30.98 percent. Revenue for the quarter rose 1.86 percent to Rs.609.77 million from Rs.598.61 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.6.39 a share during the quarter, registering 30.98 percent increase over previous year period. Profit before interest, depreciation and tax is Rs.58.53 millions as against Rs.53.69 millions in the corresponding period of the previous year.

Outlook and Conclusion: At the current market price of Rs.208.15, the stock P/E ratio is at 8.00 x FY13E and 7.13 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.26.02 and Rs.29.19 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 12 percent and 10 percent over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 4.41 x for FY13E and 4.02 x for FY14E. Price to Book Value of the stock is expected to be at 1.30 x and 1.10 x respectively for FY13E and FY14E. We recommend ‘BUY’ in this particular scrip with a target price of Rs 235 for Medium term investment," says Firstcall Research report.

Institutional holding more than 40% in Indian cos

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.

Read More