Brokerage house Firstcall Research is bullish on Butterfly Gandhimathi Appliances and has recommended buy rating on the stock with a target price of Rs 348 in its August 24, 2013 research report.
Firstcall's research report on Butterfly Gandhimathi Appliances
"For Q1 FY14, Butterfly Gandhimathi Appliances posted a 90.41 percent Q-o-Q growth in net sales to Rs. 2096.93 millions. Sales to the Government of Tamil Nadu, which comprise Table Top Wet Grinders and Mixer Grinders during the year, supported the Company's top line growth. The branded Retail-cum-Institutional Sales, which contributed 54.30 percent of the total revenues during the financial year, have registered a healthy growth rate of about 22.63 percent over the previous year. The Company expects the growth momentum in the retail segment to continue at similar rate over the medium term, backed by increasing penetration in the new areas like Western and Northern India. The range of branded goods has been expanded during the current year with the addition of various models of Hand Blenders and Chimneys. During the quarter, the company net profit increased by 85.71 percent to Rs.88.53 million against Rs.47.67 million in the corresponding quarter ending of previous year. Gandhimathi was tied-up with three major oil companies (IOCL, BPCL and HPCL) for distribution of products through their gas dealers. Q1 FY14, the Company has already launched 30 new SKUs and is on track to bring a total of 70 to 75 new SKUs as planned for the Financial Year 2013-14."
"Export turnover at Rs. 64.7 million for the financial year ended on 31-03-2013 was lower as compared to Rs. 70.3 million for the year 2011-12. The Company has opened its Branch in the U.K. in October 2012 focusing the U.K. and its neighboring European Countries in the expectation of larger export volumes in the current financial year. The Company's financial health continues to be strong, marked by healthy network, strong debt protection metrics and healthy capital structure. Its liquidity remains strong, with low utilization of cash credit limits and healthy net cash accruals as compared to maturing debt obligations. Over FY2012-15E, we expect the company to post a CAGR of 18 percent and 13 percent in its top-line and bottom-line respectively. Hence, we recommend 'BUY' the stock with a target price of Rs 348," says Firstcall Research report.
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