AUM Capital's research report on Huhtamaki PPL
Huhtamaki PPL's Q1CY16 reported net sales of Rs 525.61 crs, registering a growth of 18.82% YoY. The net profit grew by 64.24% to Rs 34.95 crores during the period under review. The margins during the quarter improved to 15.02% due to lower raw material prices. Going forward we expect HPPL sales to grow at a CAGR of 13% to Rs 2578.36 during CY16-17e. The net profit during the same period to grow at a CAGR of 23% to Rs 118.48 crs.
At the CMP of Rs 260, the stock is trading at 16.2x CY17e EPS. We recommend a BUY on the stock with a Price Target of Rs.320 (20xCY17e EPS) with an upside potential of 23% from the current level with an investment horizon of 9-12 months.
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