Moneycontrol Be a Pro
Get App
Last Updated : Nov 19, 2015 06:43 PM IST | Source:

Buy Butterfly Gandhimathi; target of Rs 240: ICICI Direct

ICICI Direct is bullish on Butterfly Gandhimathi and has recommended buy rating on the stock with a target of Rs 240 in its November 18, 2015 research report.

  • bselive
  • nselive
Todays L/H

ICICI Direct‘s research report on Butterfly Gandhimathi

Butterfly Gandhimathi Appliances’ (BGAL) Q2FY16 revenues grew 101% YoY to Rs. 311.5 crore on the back of strong Tamil Nadu Civil Supplies order execution (Rs. 150.3 crore) in Q2FY16. The EBITDA margin improved 60 bps YoY to 6.7%, driven by lower employee cost & other expenses as a percentage of sales while EBITDA grew 86.4% YoY. PAT increased to Rs. 6.56 crore vs.Rs. 1.48 crore YoY, mainly driven by higher revenue growth and lower interest cost

Outlook and Valuation

 BGAL is trading at a discount to its peers (TTK Prestige, Hawkins Cookers). We believe it is a re-rating candidate considering the strong turnaround that it has made and also the growth potential it has. We expect the FY16 performance to improve significantly driven by government orders and better margins We remain positive about the long-term prospects of the company and maintain BUY recommendation on Butterfly Gandhimathi with a revised target price of Rs. 240 (based on 14.0x FY17E EPS of Rs. 16.9). However, on a cautionary note, though the upside seems lucrative, still considering the various impediments faced by small cap stocks, we believe this should be looked at as a medium to long term investment, which has inherent risks on account of higher price volatility.

For all recommendations, click here

The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions

Are you happy with your current monthly income? Do you know you can double it without working extra hours or asking for a raise? Rahul Shah, one of the India's leading expert on wealth building, has created a strategy which makes it possible... in just a short few years. You can know his secrets in his FREE video series airing between 12th to 17th December. You can reserve your free seat here.
First Published on Nov 19, 2015 06:43 pm
Follow us on
Available On