Buy VST Industries; target of Rs 3750: ICICI Direct

ICICI Direct has recommended buy rating on VST Industries with a target price of Rs 3750 in its research report dated July 3, 2017.

July 04, 2017 / 16:16 IST

26 Aug, 2025 12:21

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ICICI Direct’s research report on VST Industries
VST industries would be the bigger beneficiary of the change in the indirect tax structure. With the abolition of excise duty and additional excise duty, net tax incidence for VST industries would come down by 8.3% and to comply with the anti profiteering clause, the company would require taking price cut by 6.0%. State VAT has been replaced by GST and cess would replace specific excise duty.

Outlook

We expect VST to clock revenue CAGR of 14.5% FY17-19E led by volume CAGR of 5.5% after witnessing volume decline for five consecutive years. Led by healthy revenue growth and EBITDA margin expansion of 510 bps, profit for the company is estimated to grow at a CAGR of 23.3% over the same period. Hence,we are upgrading our recommendation on the stock to Buy with a revised target price of| 4130/share valuing it at 25x on its FY19E EPS of | 164.6.

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