Sharekhan's research report on KPR Mill
In Q1FY23, KPR Mill’s (KPR’s) revenue growth was strong for yet another quarter, at 75.5% y-o-y to Rs. 1,584.8 crore aided by a 63% y-o-y growth in the textile business, while the sugar business reported 2.6x y-o-y growth. Yet, EBITDA margin fell by 160 bps y-o-y to 23.2%, as cotton/yarn prices surged. PAT grew by 35.3% y-o-y to Rs. 226.7 crore. Textile business PBIT margin came in at 22.8% (down 106 bps y-o-y), while sugar business PBIT margin stood at 9.7% (up 426 bps y-o-y). A slowdown in global export markets and higher input prices would keep near-term performance stressed but KPR’s integrated business model would help it recover faster than peers.
Stock trades at 21.0x/17.8x its FY2023E/FY2024E EPS and 13.7x/11.5x its FY2023E/FY2024E EV/EBITDA. We maintain a Buy with a revised PT of Rs. 710.
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