JM Financial is bullish on Indo Count Industries has recommended buy rating on the stock with a target price of Rs 140 in its research report dated February 19, 2018.
JM Financial's research report on Indo Count Industries
Indo Count Industries (ICNT) reported a weak set of numbers for 9MFY18, driven by a) decline in the volume of bed sheets exported to the US, b) INR appreciation and c) higher costs. Margins for 9MFY18 compressed 604bps YoY to multi-year lows. 9M PAT declined 42% YoY to INR 1bn, below our estimates of INR 1.1bn. The company has completed phase-I capex to augment capacity from 68mn mtrs to 90mn mtrs. Management maintained FY18 volume guidance at 56mn mtrs. Cotton price movement and the off take in volume going forward remains the key monitorable.
OutlookWe downward revise our FY18E/FY19E earnings in tandem with the recent performance and roll forward to FY20E to arrive at our revised fair value of INR 140/share. Maintain BUY.
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