Buy Trident; target of Rs 90: Cholamandalam Securities

Cholamandalam Securities' research report on Trident

Trident’s revenue grew by 18%YoY to INR 12.9bn; Textile revenue grew by 18.6% YoY to INR 10.3bn, aided by strong in the home textile segment and Paper revenue grew 15.7% YoY to INR 2.59bn. Bed linen revenue grew 41.7% YoY, aided by 33.3% YoY increase in volume and 8.4% YoY increase in realization. Bath linen grew 10.1% YoY, aided by volume growth of 12.2% YoY, while realization de-grew by 2.1% YoY.

Outlook

At CMP, Trident is trading at 9.1X & 7.8X FY20E & FY21E earnings and we rollover the valuation to FY21E and revise the target price upwards to INR 90 valuing the company at 10X FY21E EPS, while maintaining the BUY rating.