Buy Eveready Industries; target of Rs 322: Kotak Securities

Kotak Securities's research report on Eveready Industries

EIIL Q1FY19 result was higher than our estimates; company posted operating margin expansion following the immense disappointment in the previous quarter, when the company reported EBITDA loss. Management is able to reassure (during the course of our interaction) that most of the challenges are close to get sorted and situation across verticals have largely stabilized now.

Outlook

Maintain FY19/20 forecasts and DCF assumptions; we recommend ‘BUY’ with unchanged target price of Rs 322. Despite attractive upside potential, we expect stock to remain under pressure in the short term, susceptible to 1/ further developments in the CCI event and 2/ reversal in sales momentum.