Angel Top Picks - December 2017

The 6.3% GDP growth in 2QFY2018 indicates that growth in the economy is

Top Picks

rebounding, and we believe that, Indian economy is primed for growth with

Company

CMP (`) TP (`)

implementation of GST reform, strong macros and uptick in the global economy.

Banking/NBFC

Our belief in the India story continues to remain strong with positive sales data

Dewan Housing

585

712

reported by the automobile companies (strong consumption trend) as well as

GIC Housing Finance

408

655

change in the FII’s position on India. Angel Broking’s Top Picks Portfolio continues

Karur Vysya Bank

113

161

to perform well with 38% alpha generated over BSE 100 during the last two years.

Consumption

GDP data indicates rebound in the economy - The 2QFY18 GDP growth came in

Asian Granito

490

570

6.3%% vs. cons. of

6.4%. While this was slightly below the consensus

Blue Star

760

867

expectations, the data clearly shows rebound in the domestic economy. India’s

Siyaram Silk Mills

721

757

GDP growth has been consistently weak for the last five quarters, particularly the

LT Foods

last three quarters due to demonetization and GST implementation. we believe that

Century Plyboards

308

400

with 6.3% growth in the economy, the growth trajectory is ahead of us and in our

Media/Automobiles

view, we are gearing up for a 7-8% GDP growth from FY2019 onwards.

Maruti Suzuki

8,600

9,495

Music Broadcast

384

434

Exhibit 1: Rebound in domestic economy

TV Today

392

435

Rebound in the

Real Estate/Infra/Logistics/Power

GDP growth

KEI Industries

384

425

7.5

Navkar Corp.

181

265

Pharmaceutical

Consistently weak GDP growth

2.5

for last 5 quarters

Alkem Laboratories

2,080

2,287

Source: Angel Research;

Note: CMP as of December 06, 2017

Source: Company, Angel Research

Rating upgrade, key highlight of the year - With the slew of reforms and strong

improvement in the macros, India’s sovereign rating upgrade was due for some

time now. A one notch rating upgrade by Moody’s Investors Service (from Baa3 to

Baa2), stamps the strengthening of the Indian economy. Though this does not

change anything drastically, this, we believe is likely to result in improved investor

sentiment. Underlying thought remains that the economy is in well shape, which is

positive to support the market valuations.

Auto sales indicate strong domestic consumption demand - The November auto

sales lay a clear picture of strong consumption demand in the country. The PV

sales of top seven companies grew by 18.5% yoy while CV sales of the top three

companies grew by 64.2% yoy. The 2W+3W sales of top four companies grew by

21.5% yoy. The tractor volumes also grew in double digits. Overall, auto sector

witnessed strong performance in all quarters.

Reversal in FIIs mood - While DIIs had continued to buy domestic equities, FII

inflows had not shown big revival since March-17, when they invested `30,906cr

in the single month. The November FII inflows were at `19,728cr (highest since

March-17), which would have been triggered due to sovereign rating upgrade by

Moody’s. This we believe improves the sentiment in the market further.

We continue to remain bullish on the markets and accordingly we retain our

stock recommendations. We add Century Plyboards in the portfolio, as we

believe it will benefit from its MDF plant due to the affordable housing scheme.

Please refer to important disclosures at the end of this report

Top Picks Report | December 2017

Stock Info

Dewan Housing

CMP

585

 Loan growth to remain strong going ahead: Backed by healthy capital

712

adequacy and increasing demand for home loans DHFL’s loan book is

Upside

21.7%

expected to report 23% loan growth over next two three years.

Sector

Financials

 Strong Capital adequacy lends visibility for growth: DHFL sold 50% stake held

Market Cap (` cr)

18,367

by it in DFHFL Pramerica Life Insurance Co Ltd which added `1,969 cr to its

Beta

1.6

net worth and increases its CAR by 400 bps, to 19.3% which should fuel

52 Week High / Low

679 / 213

growth for next 2-3 years.

 Asset quality has been strong: Strong NIM on the back of lower cost of funds

3 year-Chart

and lower credit cost will ensure healthy return ratios for the company. Despite

700

strong growth the company has maintained stable asset quality and we expect

600

the trend to continue.

500

 Outlook: We expect the company’s loan growth to remain 23% over next two

400

years and earnings growth is likely to be more than 28%.The stock currently

300

trades at 1.9x FY2019E ABV. We maintain Buy on the stock with a target price of

200

`712.

100

Key Financials

Y/E

Op. Inc

NIM

PAT

EPS

ABV

ROA

ROE

P/E

P/ABV

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

Source: Company, Angel Research

FY2018E

2,279

2.4

1,171

37.4

268

1.3

13.8

15.6

2.2

FY2019E

2,927

2.7

1,556

49.7

305

1.5

16.2

11.8

1.9

Source: Company, Angel Research

Stock Info

Karur Vysa Bank

CMP

113

 Loan growth to pick up from FY18 onwards: KVB had a fairly strong loan

161

CAGR of 14.9% over FY11-17.However, FY17 was year of consolidation and

Upside

42.5%

loan book grew by only 4.7%. We expect loan growth to pick up to 11% over

Sector

Banking

FY17-19. Deposit growth is expected at 9% during the period.

Market Cap (` cr)

8,260

 Asset quality likely to stabilize going ahead: KVB’s slippages remained high

during FY17 and hence GNPAs % went up to 3.58% vs 1.3%. However, large

Beta

0.9

part of the troubled accounts has been classified as NPAs and hence gradually

52 Week High / Low

150 / 74

we expect the asset quality to improve. While in Q1FY18 we saw some

pressure on asset quality, it still remained fairly under control.

3 year-Chart

 NIM likely to see further improvement: There were 25 bps improvements in

160

NIM during FY17, with share of CASA growing and cost of fund coming down

140

NIM is expected to improve further going ahead.

120

100

 Outlook: We expect KVB to post a strong loan book & earnings CAGR of 11%

& 22% over FY2017-19E. The stock currently trades at 1.3x FY2019E ABV. We

have a BUY rating on the stock.

Key Financials

Y/E

Op. Inc

NIM

PAT

EPS

ABV

ROA

ROE

P/E

P/ABV

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2018E

2,388

3.7

660

10.8

77.8

12.5

10.5

1.5

Source: Company, Angel Research

FY2019E

2,757

3.9

858

14.1

89.6

1.2

14.7

8.1

1.3

Source: Company, Angel Research

December 6, 2017

Top Picks Report | December 2017

Asian Granito

Stock Info

CMP

490

 AGIL’s current, vitrified sales (35%) are lower as compared to its peers like

Somany Ceramics (47%) and Kajaria Ceramics (61%). Recently, AGIL has

570

launched various products in premium segment. Going forward, we expect

Upside

16%

AGIL’s profit margin to improve due to increase in focus for higher vitrified

Sector

Cons. Durable

product sales, which is a high margin business.

Market Cap (` cr)

1,475

 AGIL is continuously putting efforts to increase the B2C sales from the current

Beta

1.2

level (35-36% in FY17). It is expected to reach up to 50% in next 2-3 years on

52 Week High / Low

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the back of various initiatives taken by AGIL to increase direct interaction with

customers like strengthening distribution network, participation in key trade

exhibition, etc.

3 year-Chart

 In July FY2016, AGIL acquired Artistique Ceramic which has a better margin

600

profile. Going forward, we expect the company to improve its operating

500

margin from 7.5% in FY16 (excluding merger) to

13-13.5% in coming

400

financial year. Artisique Ceramics has a contract with RAS GAS to supply

300

quality natural gas at a discounted rate of 50% to current market rate, which

200

would reduce the overall power & fuel cost of the company.

100

 We expect AGIL to report a net revenue CAGR of ~10% to ~`1,286cr and net

profit CAGR of ~29% to `65cr over FY2017-19E. We recommend a Buy

rating on the stock.

Key Financials

Source: Company, Angel Research

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2018E

1,140

13.1

16.3

10.9

30.1

3.3

11.6

1.5

FY2019E

1,286

13.3

21.6

12.6

22.7

2.9

9.9

1.3

Source: Company, Angel Research

Blue Star

Stock Info

CMP

760

 BSL is one of the largest air-conditioning companies in India. With a mere 3%

penetration level of ACs vs 25% in China, the overall outlook for the room air-

867

conditioner (RAC) market in India is favourable.

Upside

14%

 BSL's RAC business has been outgrowing the industry by ~10% points over the

Sector

Cons. Durable

last few quarters, resulting in the company consistently increasing its market

Market Cap (` cr)

7,280

share. This has resulted in the Cooling Products Division (CPD)'s share in

Beta

0.4

overall revenues increasing from~23% in FY2010 to ~45% in FY2017

52 Week High / Low

826 / 436

(expected to improve to ~47-48% in FY2018E). With strong brand equity and

higher share in split ACs, we expect the CPD to continue to drive growth.

3 year-Chart

 Aided by increasing contribution from the Unitary Products, we expect the

900

overall top-line to post a revenue CAGR of ~19% over FY2017-19E and

800

700

margins to improve from

5.8% in FY2017 to

6.6% in FY2019E. We

600

recommend a buy rating on the stock.

500

400

Key Financials

300

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

200

100

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2018E

5,220

6.3

161

16.8

19.0

45.2

9.0

23.3

1.5

FY2019E

6,207

6.6

214

22.3

23.3

34.1

7.9

18.7

1.2

Source: Company, Angel Research

December 6, 2017

Top Picks Report | December 2017

Stock Info

Siyaram Silk Mills

CMP

721

 SSML has strong brands which cater to premium as well as popular mass

757

segments of the market. Further, SSML entered the ladies' salwar kameez and

Upside

ethnic wear segment. Going forward, we believe that the company would be able to

Sector

Textile

leverage its brand equity and continue to post strong performance.

Market Cap (` cr)

3,379

 The company has a nationwide network of about 1,600 dealers and business

partners. It has a retail network of 160 stores and plans to add another

Beta

0.7

300-350 stores going forward. Further, the company's brands are sold across

52 Week High / Low

222/782

3,00,000 multi brand outlets in the country.

 Going forward, we expect SSML to report a net sales CAGR of ~12% to

3 year-Chart

~`1,981cr and adj.net profit CAGR of ~16% to `123cr over FY2017-19E on

700

back of market leadership in blended fabrics, strong brand building, wide

600

distribution channel, strong presence in tier II and tier III cities and emphasis

500

on latest designs and affordable pricing points. At the current market price,

400

SSML trades at an inexpensive valuation. We have an accumulate

300

recommendation on the stock and target price of `757.

200

100

Key Financials

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2018E

1,769

12.7

106

22.6

15.4

31.9

4.9

16.4

2.1

Source: Company, Angel Research

FY2019E

1,981

12.7

123

26.2

15.5

27.5

4.3

14.4

1.8

Source: Company, Angel Research

Stock Info

Maruti Suzuki

CMP

8,600

 The Automobile sector is expected to benefit from the GST implementation.

9,495

The sector has seen a pick up in the volumes in FY17 as there were several

Upside

10.5%

positive factors like normal monsoon and lower interest rates.

Sector

Automobiles

 Maruti Suzuki continues to hold ~52% market share in the passenger vehicles.

Market Cap (` cr)

2,59,808

The launch of exciting models has helped the company to ride on the

Beta

1.0

premiumization wave that is happening in the country. In the last two years,

52 Week High / Low

8,696/5,040

company has seen improvement in the business mix with the pie of the utility

vehicles growing from ~4% to current 15%. The 2-3 months of waiting period

of new models, launch of Swift Hatchback in January-2018 and headroom for

3 year-Chart

more capacity utilization at Gujarat plant are the near term earning triggers.

10,000

9,000

8,000

 Due to the favorable business mix, company has also been seeing

7,000

improvement in the margins. Company has already moved from ~11-12%

6,000

5,000

EBITDA margin range in FY14 to current ~17% margin range in 2QFY18.

4,000

Together with higher operating leverage at Gujarat plant, increasing Nexa

3,000

outlets, and improving business mix, we believe that company has further

2,000

1,000

room to improve its margins. We have an accumulate rating on the stock.

Key Financials

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

Source: Company, Angel Research

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2018E

80,815

15.6

8,506

281.7

21.7

30.5

6.6

18.5

2.9

FY2019E

96,680

16.9

10,991

364.0

22.8

23.6

5.4

13.7

2.3

Source: Company, Angel Research

December 6, 2017

Top Picks Report | December 2017

Stock Info

TV Today Network

CMP

392

 TTNL enjoys a strong viewership ranking in the Hindi and English news

435

channel categories. The company’s Hindi news channel - Aaj Tak has

Upside

11%

maintained its market leadership position occupying the No.1 rank for several

Sector

Media

consecutive years in terms of viewership. Its English news channel - India

Today too has been continuously gaining viewership; it has now captured the

Market Cap (` cr)

2,334

No. 2 ranking from No. 4 earlier. Its other channels like Dilli Aaj Tak and Tez

Beta

0.9

are also popular among viewers.

52 Week High / Low

434 /210

 TTNL is a play of higher operating leverage that would be visible as

advertisement revenues gain traction. Going ahead, we expect EBITDA

3 year-Chart

margins would improve.

450

400

350

 We expect TTNL to report a net revenue CAGR of ~11% to ~`727cr and net

300

profit CAGR of ~14% to `122cr over FY2017-19E. We have an accumulate

250

rating on the stock

200

150

100

Key Financials

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2018E

669

26.9

109

18.3

15.3

21.4

3.2

11.3

3.0

Source: Company, Angel Research

FY2019E

749

26.9

122

20.5

17.5

19.1

3.4

10.2

2.8

Source: Company, Angel Research

Music Broadcast

Stock Info

 Radio Industry is protected by licenses for 15 years, thereby restricting the entry

CMP

384

of new players. This would support the existing companies to strengthen their

434

position and maintain a healthy growth rate.

Upside

13%

 It has grabbed the Number 1 position in Mumbai, Bengaluru and Delhi in

Sector

Media

terms of number of listener. This is helping MBL to charge premium rate,

Market Cap (` cr)

2,192

which resulting into higher EBITDA margin (33.6%) compare to 22% of ENIL.

Beta

0.6

 MBL outperformed its closest peer with 18.4% CAGR in revenue over FY2013-

52 Week High / Low

415/333

17 (ENIL reported 13.2% CAGR in revenue). On the profitability front too,

MBL, with 32.3% CAGR in PAT over FY2013-17, has performed much better

3 year-Chart

than ENIL (-5.2% CAGR in PAT). Moreover, Radio City posted a six year CAGR

420

of 12.1% v/s. 9.1% of industry owing to higher advertising volumes.

400

 Capex for 39 licenses have been done for the next 15 years, hence no heavy

380

incremental Capex requirement would emerge. Moreover, the maintenance

360

Capex would be as low as `5-10cr. This would leave sufficient cash flow to

340

distribute as dividend. We have a Buy recommendation on the stock and

target price of `434.

320

300

Key Financials

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

Source: Company, Angel Research

FY2018E

317

34.4

9.8

9.3

39.6

3.7

18.6

6.4

FY2019E

372

34.9

14.0

12.0

27.8

3.3

15.1

5.3

Source: Company, Angel Research

December 6, 2017

Top Picks Report | December 2017

Stock Info

KEI Industries

CMP

384

 KEI’s current order book (OB) stands at `2,780cr (segmental break-up:

425

`1,990cr in EPC, `560cr in Cable & `230cr in EHV). Its OB grew by ~28% in

Upside

11%

the last 3 years due to strong order inflows from State Electricity Boards, Power

Sector

Cable

grid, etc.

Market Cap (` cr)

3,009

 KEI’s consistent effort to increase its retail business from 30-32% of revenue in

Beta

1.3

FY17 to 40-45% of revenue in the next 2-3 years on the back of strengthening

52 Week High / Low

412/106

distribution network (currently 926 which is expect to increase `1,500 by FY19)

and higher ad spend (increased from `2cr in FY13 to `7.5cr in FY17 and

expected to spend).

3 year-Chart

450

 KEI’s export (FY17 - 8-10% of revenue) is expected to reach a level of ~14-

400

15% in next two years with higher order execution from current OB and

350

300

participation in various international tenders. We expect a strong

~26%

250

growth CAGR over FY2017-19 in exports. We expect KEI to report net revenue

200

150

CAGR of ~13% to ~`3,392cr and net profit CAGR of ~19% to `140cr over

100

FY2017-19E. Hence we have an accumulate rating on the stock.

Key Financials

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

Source: Company, Angel Research

FY2018E

3,001

10.0

119

15.5

21.0

22.7

4.8

10.3

1.1

FY2019E

3,392

10.0

140

18.1

20.0

19.4

3.9

9.2

0.9

Source: Company, Angel Research

Stock Info

GIC Housing Finance Ltd

CMP

408

 Backed by the new management, GICHF is aiming for 2.0x growth in the loan

655

book over the period of FY16-FY19E to `16,000cr. GICHF has healthy capital

Upside

60%

adequacy, and is seeing an increase in demand for home loans. GICHF’s

Sector

Financials

loan book is expected to report 24.3% loan growth over next two years.

 GICHF is consistently decreasing bank borrowing and increasing high yield

Market Cap (` cr)

2,197

loan book which is expected to boost its Net Interest Margin. The share of

Beta

1.3

bank borrowing was 75% in FY15, which fell to 55% in FY17. In our opinion,

52 Week High / Low

623 /251

the impetus on lower bank borrowings and increasing high yield loan book is

likely to result in 17bps NIM over FY16-FY19E.

3 year-Chart

 GICHF’s asset quality is on the higher side compared to other HFCs (As on

700

FY17 GNPA-2.3% and NPA-0.3%). This is primarily due to GICHF has not

600

written off any bad asset and has not sold any bad assets to ARC. New

500

Management is expediting asset quality improvement.

400

 We expect the GICHF’s loan growth to grow at a CAGR of 24.3% over next

300

two years and RoA/RoE to improve from 1.7%/19.0% in FY17 to 2.0%/23.0%

200

in FY19E.The stock is currently trading at 1.9x FY2019E ABV. We have a Buy

100

rating on the stock.

Key Financials

Y/E

Op. Inc

NIM

PAT

EPS

ABV

ROA

ROE

P/E

P/ABV

Source: Company, Angel Research

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2018E

376

3.6

180

184

1.7

2.2

FY2019E

477

3.7

215

219

1.9

Source: Company, Angel Research

December 6, 2017

Top Picks Report | December 2017

Stock Info

Navkar

CMP

181

 NCL is one of the largest and one of the three CFS at JNPT with rail

265

connectivity, helping it garner high market share at the port. NCL is in a massive

Upside

46%

expansion mode where it is increasing its capacity by 234% to 1,036,889 TEUs

Sector

Logistics

at JNPT and coming up with an ICD at Vapi (with Logistics Park).

Market Cap (` cr)

2,728

 The ICD with rail link should benefit from first mover advantage in a region

Beta

0.8

that has huge market potential and accounts for ~27% of volumes at JNPT.

The ICD should be able to capture the EXIM volumes from the region through

52 Week High / Low

247 / 155

rail link that till now was being custom cleared at JNPT (Import) or being

transported via road and consolidated at JNPT (Export). South Gujarat

3 year-Chart

250

volumes will now head straight to the Vapi ICD; thus the company can now

cater to bulk commodities and domestic traffic that it had been rejecting owing

200

to capacity constraints at CFS.

150

 We expect NCL to successfully use its rail advantage and scale up its

100

utilizations at both JNPT and Vapi ICD. We have a Buy rating on the stock.

Key Financials

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2018E

400

41.5

104

7.3

6.9

22.5

1.8

17.8

7.4

Source: Company, Angel Research

FY2019E

530

41.5

142

9.9

8.6

15.4

1.6

13.3

5.5

Source: Company, Angel Research

Stock Info

Alkem Laboratories

CMP

2,080

 Alkem is 5^th largest pharma company is the domestic market and also has

2,287

presence in US. It derives 73% of its revenues come from the Indian markets

Upside

10%

while rest come from the other countries. Alkem has leadership position in the

domestic anti infective segment and it is ranked #3 in Gastro-Intestinal and

Sector

Pharmaceutical

Pain/Analgesics segments. Company holds ~3.6% and ~7.9% market share

Market Cap (` cr)

24,869

in the formulations and overall prescriptions in the country.

Beta

0.4

 In the domestic market, company operates in acute and chronic segments. It is

52 Week High / Low

2,238 /1,535

a prominent player in acute segment has forayed in chronic segment from

which it expects faster growth. Alkem has been outperforming the domestic

3 year-Chart

industry growth which is likely to continue. Company is focusing on

2,500

monetization of its pipeline (92 ANDAs) in the US with high single digit ANDA

launches to grow the US revenues at ~20% growth rate from FY17-FY19E.

2,000

 Overall outlook remains strong with 9% CAGR in the topline and 13% CAGR

1,500

in the bottom-line. We have an accumulate rating on the stock.

1,000

Key Financials

500

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2018E

6,272

17.5

862

72.1

17.6

28.9

5.1

22.3

3.9

FY2019E

7,254

19.8

1,139

95.3

19.6

21.8

4.3

16.7

3.3

Source: Company, Angel Research

December 6, 2017

Top Picks Report | December 2017

Stock Info

LT Foods

CMP

 LT Foods LTD (LTFL) is branded specialty Foods Company engaged in milling,

processing and marketing of branded/non-branded basmati rice and

Upside

31%

manufacturing of rice food products in the domestic and overseas markets.

Sector

Food Processing

 LTFL’s flagship brand Daawat enjoys 22% market share in the branded rice

Market Cap (` cr)

1,943

market of India. It also has strong market share in North America selling

Beta

1.0

Basmati rice under the brand ‘Royal’. Currently it has access to 1,40,000

52 Week High / Low

84 / 21

traditional retail outlets, 93% reach of towns with over 2 lakh population,and

a access to 3000 Wholesalers. It has also strong network in modern trade.

3 year-Chart

LTFL is the 1st Rice company to place Brown Basmati Rice in Medical Chains.

 The company has a well-diversified product basket catering to consumers of

all income groups. The company is present in segments like Basmati rice,

Specialty rice (non-Basmati) and Other food products.

 Outlook remains strong with 14%/20% CAGR in the top-line/bottom-line. We

recommend Buy on the stock with Target Price of `96 (15x FY2019E EPS).

Key Financials

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

Source: Company, Angel Research

FY2018E

3,747

11.5

139

5.2

17.5

14.0

2.4

8.2

0.9

FY2019E

4,234

11.5

170

6.4

17.6

11.4

2.0

7.2

0.8

Source: Company, Angel Research

Stock Info

Century Plyboards India

CMP

308

 Century Plyboards India Ltd (CPIL) is a plywood manufacturer dealing in

400

plywood, laminates, MDF (Medium Density Fibreboard) and others with

Upside

30%

presence across India and overseas. CPIL is also engaged in logistics business

Sector

Miscellaneous

through management of a container freight station.

Market Cap (` cr)

6,854

Beta

1.0

 Indian plywood industry is estimated at `18,000cr and is largely unorganised

(~75% share of revenues). However, with the implementation of GST, the

52 Week High / Low

326/154

share of organized players is expected to improve, which would be beneficial

for branded players like CPIL.

3 year-Chart

350

 CPIL has recently added new MDF plant (1,98,000 m³, to generate ~`450-

300

500cr revenue), laminates

(4.8 mn sheets by scaling ~50%, to generate

250

~`250-300cr revenue), particle boards

(`100cr of revenue). Capacity

200

addition across segments would boost revenue and profitability going ahead.

150

100

 We expect CPIL to report net revenue & PAT CAGR of ~17% & 16%

respectively. We have a Buy recommendation with Target Price of `400.

ey Financials

Y/E

Sales

OPM

PAT

EPS

ROE

P/E

P/BV

EV/EBITDA

EV/Sales

Source: Company, Angel Research

March

(` cr)

(%)

(` cr)

(`)

(%)

(x)

FY2018E

450

41.5

124

8.7

8.4

22.5

1.8

16.6

6.9

FY2019E

617

41.5

181

12.7

11.0

15.4

1.6

12.0

5.0

Source: Company, Angel Research

December 6, 2017

Top Picks Report | December 2017

Research Team Tel: 022 - 39357800

E-mail: [email protected]

Website: www.angelbroking.com

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Ratings (Based on expected returns

Buy (> 15%)

Accumulate (5% to 15%)

Neutral (-5 to 5%)

over 12 months investment period):

Reduce (-5% to -15%)

Sell (< -15)