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Visaka Industries Ltd Research Report - 16th Dec 2015

Cement | Published on Nov 18th 2014

IT

Visaka Industries (VIL) is engaged in two businesses – building products (cement asbestos products and fibre cement flat products like V-boards and V-panels) and synthetic yarn. It has an installed capacity of 7,52,000MT of cement asbestos products with a strong network of 6000 plus stockists / dealers across India. In the synthetic yarn segment it has an installed capacity of 31 MTS M/CS. With consumer and business confidence improving in building products segment and sustainable performance of its synthetic yarn segment, we expect the company to post a strong performance going ahead. The companys depreciation cost is expected to increase sharply in FY2015 due to changes made in the Companys Act 2013 which lays down the new rates for depreciation of fixed assets. However, in FY2016E, the depreciation cost is expected to decline by ~30% yoy which will significantly boost profits. We expect the net profit to grow at a CAGR of 81% over FY2014-16E to Rs39cr. At the current price of Rs123, the stock is trading at a valuation of 5x FY2016E EPS, which we believe is attractive. We initiate coverage on VIL with a Buy rating and a target price of Rs174, valuing the stock at 7x on FY2016E earnings.

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CMP 123
Target Price 174
Investment Period12 Months

Stock Info

MCAP BSE (Rs in Cr)310.22
MCAP NSE (Rs in Cr)311.96
P/E (x)8.75
EPS (Rs.)22.32
BV (Rs.)234.53
Div Yield (%)2.56
FV (Rs.)10.00
P/BV (x)0.83
EV/Sales (x)0.59
EV/EBITDA (x)5.41

Shareholding Pattern (%)

Public & Others59.0
Promoter38.0
Foreign3.0
Corporate0.0
Institution0.0
Grand Total100.0

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