January 30, 2017 / 16:05 IST
EVRIN’s 3QFY17 revenue grew 2% YoY to INR 3,294m (est. of INR 2,852m). Growth, however, was impacted by lower demand due to demonetization, flattish growth in battery and a decline in flashlights. LED business grew 73% YoY. This, however, was offset by a 56% decline in CFL business, leading to small blended growth in the lighting segment.
OutlookWe believe that new categories and LED business will drive growth for EVRIN, leveraging upon its strong brand. Excluding the impact of one off tax reversal (INR 83m), we have increased our recurring earnings estimate for FY17E/FY18E by 22%/8% mainly because the impact of demonetization was lower than our initial expectations. We expect revenue CAGR of 8% and PAT CAGR of 22% over FY16-19E. We value the stock at 17x FY19E; maintain Buy with a target price of INR 287.
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