Buy Shilpi Cable Technologies; target of Rs 73: Firstcall

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Firstcall Research's report on Shilpi Cable TechnologiesShilpi Cable Technologies Ltd incorporated in 2006 is a young entity currently focused on Auto and Telecom Sector working with Global players and a leading position in the segments it operates. The company’s net sales registered 43.41% increase in Q1 FY16 and stood at a record Rs. 10108.83 million from Rs. 7048.74 million over the corresponding quarter of previous year. In Q1 FY16, Net profit jumps to Rs. 554.91 million an increase of 47.91% y-o-y against Rs. 375.18 million in the corresponding quarter of previous year. In Q1 FY16, Operating profit is Rs. 871.15 million as against Rs. 573.43 million in the corresponding period of the previous year, grew by 51.92% y-o-y. Profit before tax (PBT) at Rs. 626.72 million in Q1 FY16 compared to Rs. 418.03 million in Q1 FY15, registered a growth of 49.92%. The company has reported an EPS of Rs. 5.41 for the 1st quarter as against an EPS of Rs. 7.61 in the corresponding quarter of the previous year. The company has recommended a final dividend of Rs. 1.00 per Equity Share for the financial year ended March 31, 2015. Net Sales and PAT of the company are expected to grow at a CAGR of 48% and 40% over 2014 to 2017E respectively. OUTLOOK AND CONCLUSIONAt the current market price of Rs. 63.55, the stock P/E ratio is at 2.35 x FY16E and 2.87 x FY17E respectively. Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.27.05 and Rs.22.11 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 48% and 40% over 2014 to 2017E respectively. On the basis of EV/EBITDA, the stock trades at 2.94 x for FY16E and 2.61 x for FY17E. Price to Book Value of the stock is expected to be at 0.91 x and 0.69 x for FY16E and FY17E respectively. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs.73.00 for Medium to Long term investment., says Firstcall Research Report.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.

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