Siyaram Silk Mills Ltd Research Report - 21st Nov 2016

Miscellaneous | Published on Nov 21st 2016


Siyaram Silk Mills (SSML)’ results for 2QFY2017 have come in below our estimates, both on top-line and bottom-line front, on back of lower volume growth due to weak consumer buying sentiments. Going forward, we expect SSML to report net sales CAGR of ~10% to ~Rs1,948cr and adj. net profit CAGR of ~11% to Rs107cr over FY2016-18E. The same would be on the back of market leadership in blended fabrics, strong branding, wide distribution channel, strong presence in tier II and tier III cities, and emphasis on latest designs at affordable pricing points. At the current market price, SSML trades at an inexpensive valuation (at a P/E of 10.4x its FY2018E earnings). We recommend a Buy rating on the stock with the target price of Rs1,605.

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CMP 1,187
Target Price 1,605
Investment Period12 Months

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Shareholding Pattern (%)

Public & Others22.0
Grand Total100.0

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