KR Choksey's research report on Prabhat Dairy
Prabhat dairy posted its Q4FY17 results which were below our estimates and margins were affected mainly due to higher tax expense. Its Net sales posted was INR 3771.8 Mn which is the growth of 23.0% yoy was below our estimate of projected net sales growth of 39%. EBIDTA stood at INR 298.4 Mn which is a growth of 17.0% yoy and de-growth of 21% qoq.
Outlook
We expect revenue growth to be around 17-18% for FY18E and FY19E. EBIDTA and PAT margin to improve with more products in B2C and value added segment. We expect EBIDTA margins to be around 9.3% to 9.6% and PAT margins to be in range of 2.5% to 3.0%. At CMP of INR 109.4, we have a “BUY” rating on the stock with target price of INR 139 and upside of 26.8 %.
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