Get App
Last Updated : Dec 27, 2018 03:55 PM IST | Source:

Buy Emmbi Industries; target of Rs 160: ICICI Direct

ICICI Direct is bullish on Emmbi Industries has recommended buy rating on the stock with a target price of Rs 160 in its research report dated December 27, 2018.

Broker Research @moneycontrolcom
  • bselive
  • nselive
Todays L/H

ICICI Direct's research report on Emmbi Industries

Emmbi Industries (Emmbi) reported a healthy Q2FY19 performance Net sales in Q2FY19 were at Rs 73.3 crore, (up 21.8% YoY) EBITDA in Q2FY19 came in at Rs 10.3 crore with corresponding EBITDA margins at 14.0%, up 20 bps YoY PAT in Q2FY19 was at Rs 4.4 crore, up 18.9% YoY The company is putting its new capacity (food grade FIBC+ pond liner) to optimum use and is stated to attain peak capacity utilisation, going forward, in FY20E. Capacity utilisation in FY19E is expected at ~80%+ while the same is expected at 90%+ Emmbi is well placed to attain higher double digit topline and bottomline growth in FY18-20E.


Emmbi is a capital efficient player with ~2x asset turnover, stable ~14% EBITDA margin profile and ~90 days working capital cycle. Hence, it generates RoICs to the tune of 16%+. It generates healthy cash flows with present CFO yield at 10%+. Its present debt: equity was at 0.7x as of FY19E and is expected to taper down to 0.5x in FY20E. Going forward, we expect sales volume to grow at 11.3% CAGR in FY18-20E to 22,500 tonne in FY20E. Consequent, sales & PAT are expected to grow at a CAGR of 14.0% & 24.5%, respectively, in FY18-20E. We value Emmbi at 12.0x P/E (0.5x PEG) on FY20E EPS of Rs 13.4 to arrive at a target price of Rs 160. We maintain our BUY rating on the stock. We believe the recent correction in stock price offers a good buying opportunity.

For all recommendations report, click here

Disclaimer: 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.

First Published on Dec 27, 2018 03:55 pm
More From
Follow us on
Available On
PCI DSS Compliant