Firstcall research is bullish on Tilaknagar Industries and has recommended buy rating on the stock with a target of Rs 51 in its September 2, 2014 research report.
Firstcall research report on Tilaknagar Industries
Tilaknagar Industries Ltd. (TI) is among India’s leading alco-bev business companies with an outstanding collection of brands across the IMFL spectrum comprising whisky, brandy, rum, gin and vodka. These brands include Mansion House, Courrier Napoleon, Madiraa, BLACPOWER, White House, Savoy Club, Castle Club and MH VSOP, among others. TI is among a handful of companies to possess four Millionaire brands (Mansion House Brandy, Madiraa Rum, Brigadier’s No. 1 Brandy and Vorion No. 1 Indian Brandy).
The Company manufactures markets and sells more than 40 brands across all price points. TI’s subsidiaries are Prag Distillery (P) Ltd, Vahni Distilleries Private Limited, Kesarval Springs Distillers Pvt. Ltd., Punjab Expo Breveries Private Limited, with additional 4 subsidiaries for TI’s allied activities. The Company exports its products to Western Africa, the Middle East, the Far East and Caribbean countries.
TI enjoys a near pan-India sales play with a strong presence in South India, the country’s largest consumer of alcoholic beverages. TI expects to continue to embrace its two-pronged strategy of organic growth (through strategic product launches and continual investments in its brands) and inorganic growth (through forging mutually beneficial marketing and distribution, manufacturing and branding alliances) that add long-term value for shareholders.
>>At the current market price of Rs.42.30, the stock P/E ratio is at 7.08 x FY15E and 6.35 x FY16E respectively.
>>Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.5.98 and Rs.6.67 respectively.
>>Net Sales and PAT of the company are expected to grow at a CAGR of 11% and 18% over 2013 to 2016E respectively.
>>On the basis of EV/EBITDA, the stock trades at 2.67 x for FY15E and 2.39 x for FY16E.
>>Price to Book Value of the stock is expected to be at 0.84 x and 0.74 x respectively for FY15E and FY16E.
>>Strong distribution network gives a unique edge to strengthen presence in existing markets in South and expedite growth in East. TI continues to strengthen market mix.
We recommend ‘BUY’ in this particular scrip with a target price of Rs.51.00 for Medium to Long term investment.
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