The net revenue for the quarter grew by 15.5% yoy to Rs 5.2 bn and was inline with our estimates, driven by 11.5% yoy growth in IMFL volume which was at 5.2 mn cases. Volume in Prestige and above segment grew at 14.6% yoy while Regular segment grew at 10.3% yoy. Volume growth slowed on qoq due to seasonality factor and demand from UP normalized after high stocking by dealers in Q1FY19. EBITDA margins in the quarter expanded by 300 bps yoy to 17.7% led by premiumization, better realization due to price hike in certain states on yoy and lower raw material cost. The company expects higher EBITDA margins based on better product mix, benefits of price hikes and lower raw material prices.
OutlookBased on FY19E/FY20E revised EPS of Rs 14/17.2, the stock is trading at PE of25.3/20.5x. We upgrade our rating on the stock to BUY (Vs Accumulate earlier) with revised target price of Rs 431(Vs Rs 449 earlier) valuing the stock at 25x FY20E EPS (vs earlier 27x).
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