Buy KPR Mill: target of Rs 810: Sharekhan

Sharekhan's research report on KPR Mill

KPR Mill (KPR) continued its strong revenue growth momentum in Q4FY2022. Revenue grew 30% y-o-y to Rs. 1,449.9 crore; the textile business continued to grow strongly with 34% y-o-y revenue growth, while the sugar business reported 12.6% y-o-y revenue growth. EBITDA margin declined by 75 bps y-o-y to 23.2%, affected by the surge in cotton/yarn prices. PAT grew by 18% y-o-y to Rs. 220 crore. Strong export demand and capacity expansions will help the garmenting division’s revenue to post a 20% CAGR over FY2022-FY2024. Sugar business would receive full benefits of expanded capacity from FY2023.

Outlook

The stock currently trades at 22.1x/18.1x its FY2023E/FY2024E EPS and 14.4x/11.8x its FY2023E/FY2024E EV/EBITDA. We maintain Buy with an unchanged PT of Rs. 810.

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