February 17, 2017 / 10:47 IST
In Q3FY17, Emmbi Industries Ltd (EMMBI) reported net sales of INR 551.3 Mn which (was broadly in-line with our estimates of INR 571 Mn) increased by 4.27% Y-o-Y but declined marginally by 2.3% Q-o-Q. Net sales were lower by 3% than our estimate resulting out of demonetization affecting demand for company’s domestic business.
Outlook
We recommend a “BUY” rating and assign a PE of ―12X on FY19E of INR ―15.2 to arrive at a target price ―180. At CMP of INR 128, EIL is currently trading at 20.6x FY17 EPS of INR 6.2 (vs. previous estimate of 7.2), 12x on FY18 EPS of INR 10.7 and 8.5x on FY19 EPS of INR 15.0.
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