Hold Skipper; target of Rs 240: Sharekhan

Sharekhan's research report on Skipper

For Q1FY2018, Skipper reported better-than-expected topline growth of 40% YoY to Rs.399 crore due to spillover orders in the engineering segment from Q4FY2017 to Q1FY2018. The engineering segment grew by 42% YoY, driven by volume growth and realisation. The infrastructure segment showed robust growth with topline more than doubling to Rs.24 crore, while the PVC segment’s revenue grew marginally by 3% YoY to Rs.43 crore due to slower restocking in channels post GST.

Outlook

We downgrade our rating on the stock to Hold from Buy but maintain our price target (PT) of Rs.240, given the strong earnings CAGR of 21% over FY2017- FY2019E, a leaner balance sheet and steady cash flows.