Hold Apcotex Industries; target of Rs 230: ICICIdirect

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26 Aug, 2025 12:21

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ICICIdirect's report on Apcotex IndustriesApcotex Industries (AIL) reported its Q2FY16 results, which were in line with our estimatesRevenues came in at Rs 67.8 crore, down 25% YoY and up 1.5% QoQ. This was mostly due to lower realisations in its products segments, viz. latex & rubberEBITDA came in at Rs 9.5 crore, down 7.5% YoY and flat QoQ. EBITDA margins came in at 14% vs. 11.4% YoY. Margins were flat QoQ (14.2% in Q1FY16) due to stable raw material pricesPAT came in at Rs 5.3 crore, down 25% YoY and 12.7%QoQ. PAT was down QoQ mostly due to lower other incomeValuationIn line with our previous stance, Q2FY16 reinforces our positive view on the stock. We believe the company will continue its growth momentum, albeit at a slower pace. Accordingly, we have revised our EPS estimates for FY16E and FY17E to Rs 11.2 and Rs 12.5, respectively. AIL’s low gearing ratio of 0.2x, strong operating cash flow generation of Rs 54.7 crore (FY16E-17E), progressive dividend policy and high return ratios gives us reasonable confidence in the business model, going ahead.Announcement of capex plans by Q3FY16E can further be a re-rating catalyst for the stock, as it will further enhance the revenue visibility of the company over the next two to three years. We maintain the valuation multiple of 18.5x on FY17E EPS to arrive at a target price of Rs 230, says ICICIdirect research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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