Buy Stylam Industries; target of Rs 135: Firstcall Research
Brokerage house Firstcall Research is bullish on Stylam Industries and has recommended buy rating on the stock with a target price of Rs 135 in its research report dated March 18, 2015.
August 05, 2015 / 03:48 PM IST
Firstcall Research's report on Stylam Industries
“Stylam Industries Limited Incepted in the year 1991 as a private limited concern. The foundation stone of the company was laid down by the name of Golden Laminates Ltd. The company started its journey to success from the manufacturing of Luxury decorative laminated sheets for both residential as well as industrial applications. Combining industrious efforts and wide experience, the company deals in industrial as well as advanced laminates i.e. Post forming and Antistatic laminates under the brand name STYLAM. Stylam Industries Limited is an ISO 9001:2008 certified Company that itself shows the integrity, quality and reliability of the company. The design and efficiency of the laminates have assisted the company is winning the award of CE Marking. The company is in the business of laminates i.e. Decorative Laminates, Metallic Laminates, Compact Laminates, Exterior Laminate etc. Over the past 23 years, the company has created multiple drivers of growth by developing a portfolio of world-class products.”
“The company has achieved a net profit of Rs. 27.17 million for the 3rd quarter of the financial year 2015 as against Rs. 20.03 million in the corresponding quarter of the previous year. In Q3 FY15, turnover of Rs. 539.54 million against Rs. 475.80 million in the corresponding quarter of the previous year. EBITDA of Rs. 51.30 million in Q3 FY15 and decrease of 25.74% against the corresponding period of last year. The company has reported an EPS of Rs. 3.71 for the 3rd quarter as against an EPS of Rs. 2.74 in the corresponding quarter of the previous year. During the quarter, total Expenditure rose by 23 per cent mainly on account of Employee Benefit Expenses by 19%, consumption of Raw materials by 19% and other expenditure by 5% are the primary attribute for the growth of expenditure. Total expenditure in Q3 FY15 stood to Rs. 515.43 million as against Rs. 419.45 million in Q3 FY14.”
“At the current market price of Rs. 116.55, the stock P/E ratio is at 8.52 x FY15E and 7.04 x FY16E respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 19% and 44% over 2013 to 2016E respectively. On the basis of EV/EBITDA, the stock trades at 6.82 x for FY15E and 6.07 x for FY16E. Price to Book Value of the stock is expected to be at 1.91 x and 1.51 x respectively for FY15E and FY16E. 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.135.00 for Medium to Long term investment”, says Firstcall Research report.
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