February 07, 2017 / 17:04 IST
McLeod Russel India (MRIL) reported 13.8% YoY decline in sales for the quarter to Rs 432.6 crore (I-direct estimate: Rs 489.4 crore). Pressure on both demand and price in export as well as the domestic market continued for the quarter due to the excessive production in Kenya. Tea price per kg declined by 10% YoY to Rs 170.3 and the volume declined by 4.2% YoY to 214 lakh kg.
OutlookWe are estimating mere Rs 1.3 crore profit for FY17E & improvement in FY18E and FY19E to Rs 51.7 crore and Rs 83.7 crore profit, respectively with improvement in operating margin and lower interest outgo. We remain cautious on the growth outlook and continue to maintain our HOLD recommendation on stock with a target price of Rs 151.
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