Buy Manpasand; target of Rs 750: Motilal Oswal

Manpasand Beverages (MANB) is leading player in beverages segment through its flagship product Mango Sip, a mango-based fruit drink launched in 1997. The product contributed 80% to revenues in FY16 (97% in FY14). To diversify the portfolio, MANB launched Fruits Up in FY15, a premium fruit drink (Carbonated and non-carbonated) in mango, litchi, guava, apple, orange and mixed fruit flavors. It recently launched its natural coconut water through brand Coco Sip in May 2016. In 2015, it raised INR 4b through IPO to set up a manufacturing facility in Haryana (INR.1.5b), modernization of existing plants and repay the entire long-term debt (INR1b).

 

MANB to clock 49% revenue CAGR and 63% PAT CAGR over FY16-18E. We value the stock at PE of 28x FY18 EPS (~0.3x PEG v/s ~ 1.6x of consumer peers). We initiate coverage with a ‘Buy’ with TP of INR750 (~44% upside).For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.