Buy Sintex Industries; target of Rs 125: Firstcall Research

Firstcall Research's report on Sintex Industries

"Net sales of the company have increased by 9.75% to Rs. 21763.38 mn in the quarter as against Rs. 19830.61 mn over the corresponding quarter in the previous year. Net profit grew by an insignificant 22.71% of Rs. 1977.84 mn in Q4 FY15 as compared to Rs. 1611.74 mn over corresponding quarter of previous period. EBIDTA was up by 24.34% to Rs. 4562.08 mn in Q4 FY15 as against Rs. 3669.00 mn over the same quarter previous year. Profit before tax increased by 63.10% to Rs. 2928.82 mn from Rs. 1795.77 mn in Q4 FY14. The prefabricated building systems continued its robust growth registering 26% in FY15. Custom molding represents 44% of the consolidated revenues. The segment is over US $ 500 mn in revenue terms and represents immense opportunities both globally and domestically. The global business grew a significant 22% in INR terms, though Euro was subdued in second half of FY15, else the growth would have been higher. Driven by strong utilization, new product launches and healthy response from customers the textile business revenue rose by 33% during FY 15."

"EBIDTA margins were at 25% during the year under review. The spinning expansion is in full swing to commence 1,00,000 spindles by September 2015. The balance 2,20,000 spindles will be operational by March 2016. Once fully commissioned the facility will be the largest compact spinning capacity at a single location in Gujarat. The company has made significant strides during the year which is reflected in top line growing at 20% and bottom line over 45%. Domestically, the Make in India initiative taken by the government of India will augment the long term growth for the company business. Thus, we recommend ‘BUY’ for the scrip with a target price of Rs 125 for medium to long term investment", says Firstcall Research Report.

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