Buy EMMBI Industries; target of Rs 139: KR Choksey

KR Choksey's research report on EMMBI Industries

In Q4FY22, Emmbi’s revenue grew 17.9% YoY to INR 1,091 mn. Though on sequential basis revenue was marginally down by 0.5% QoQ. For FY22 revenue stood at INR 4,356 mn, a growth of 59% YoY. EBITDA has seen a growth of 47% YoY to INR 128 mn. On QoQ basis EBITDA was mostly flat, up by 1% QoQ. EBITDA margin saw an expansion of 233 bps YoY and 18 bps QoQ to 11.7%. PAT has seen a strong growth of 49.9% YoY to INR 46 mn. However on QoQ basis PAT suffered a decline of 9.3%. PAT margin expanded by 90 bps YoY to 4.2%, though on QoQ basis it suffered a decline of 41 bps.

Outlook

We now value the stock at 6.25x (earlier 7.3x) on its revised FY24E EPS of INR 22.2/share (earlier INR 19.2/share), which yields a target price of INR 139 (unchanged) giving an upside potential of 50.7%. Accordingly, we maintain our ‘BUY’ rating on the stock .

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