Buy Trident; target of Rs 81: Cholamandalam Securities

Cholamandalam Securities' research report on Trident

Trident’s revenue de-grew by 3%YoY to INR 11.3bn, which is below our expectation of INR 12.1bn; Textile revenue de-grew by 5.3% YoY to INR 9.16bn, due to continuous de-stocking of bath linen by large retailers in US and Paper revenue grew 7% YoY to INR 2.15bn. Bed linen revenue grew 47% YoY, aided by 32% YoY increase in volume and 15% YoY increase in realization. Bath linen de-grew 17% YoY, while realization was stable.

Outlook

At CMP, Trident is trading at 9.1X & 7.6X FY19E & FY20E earnings and we maintain a BUY rating, with a target price of INR 81 valuing the company at 10X FY20E EPS, representing an upside potential of 31.5%.