KR Choksey's research report on Hatsun Agro
Revenue in Q1FY19 stood at INR 12.3 Bn (+5.9% YoY), which was marginally below our estimates of INR 12.9 Bn. The top line was mainly driven by value added products, Aroon Ice-creams and better demand across all the categories. EBIDTA stood at INR 1.2 Bn (+18.9% YoY), with OPM at 9.9% (+108 bps YoY). The reduction in milk prices and purchase of other finished goods has resulted in better operating margins. PAT stood at INR 378.6 Mn (+7.6% YoY), with NPM at 3.1% (+5 bps YoY).
At CMP of INR 630, the stock is trading at P/E of 78x for FY20E. We assign a P/E multiple of 81x and recommend ‘HOLD’ rating on the stock with the target price of INR 652 representing an upside of 3.4%.
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