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Last Updated : Aug 14, 2019 04:31 PM IST | Source: Moneycontrol.com

Accumulate Apar Industries; target of Rs 795: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Apar Industries with a target price of Rs 795 in its research report dated August 14, 2019.

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Prabhudas Lilladher's research report on Apar Industries


Apar Industries (Apar) reported strong set of numbers for 1QFY20 with revenue/PAT up 33%/42% YoY to Rs20bn/Rs412 mn (PLe Rs17bn/Rs334 mn). The top-line growth was led by growth across segments that is Conductors/Transformers Specialty Oils/Power Telecom Cables which grew by 61%/8%/24% YoY respectively. EBITDA margin of 6.9% was higher than PLe of 6.6% due to improvement in Cable segment (+370bps YoY). PAT for the quarter grew 42% YoY to Rs0.4 bn (PLe Rs0.3 bn). Going ahead, management indicated of weak demand, mainly in the power sector related segments (Conductor and Transformer Oil) due to delay in payments by state utilities. However, strong capex in Railways and Defence augers well for Cable segment. Improving revenue mix by increasing share of high-margin products in all the three segments in FY20 to improve overall profitability.


Outlook


We have maintained our earnings estimates for FY20/21E. The stock is currently trading at 11.4/9.1x FY20/21E. We maintain our Accumulate rating on the stock with TP of Rs 795.


For all recommendations report, click here

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First Published on Aug 14, 2019 04:31 pm
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