November 04, 2016 / 17:53 IST
EID Parry (EID), incorporated in 1975 is a significant player in sugar with interests in promising areas of Bio Pesticides and Nutraceuticals. The company also has a significant presence in farm input business through its subsidiary, Coromandel International Ltd where it has a 60.79% stake. EID Parry, together with its subsidiaries, has 9 sugar factories having a capacity to crush 39000 tonnes of cane per day, generate 160 MW of power and 4 distilleries having a capacity of 230KLPD and sugar refinery of 2000 TCD. The sugar factories are spread across southern states of Tamilnadu, Puducherry, Andhra-Pradesh and Karnataka.
At CMP of Rs. 252, the stock trades at 17.8x its FY18E EPS. We value the company on SOTP valuation basis and arrive at target price of Rs. 350. (Value of 62% stake Coromandel is valued at 35% discount to current market price is 167/share and standalone business we value at 13 times FY 18 profits and arrive at valuation of 184 Rs/share) with an upside of 39% over a period of 9-12 months.
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