Buy Asian Granito India, target Rs 625: Edelweiss Financial Services
Buy Asian Granito India Ltd. at a price target of Rs 625.
By ETMarkets.com | Updated:
Edelweiss Financial Services has a buy call on Asian Granito India Ltd. with a target price of Rs 625. The current market price of Asian Granito India Ltd. is Rs 430.7.
Time period given by the brokerage is Two Year when Asian Granito India Ltd. price can reach defined target. .
Asian Granito India Ltd., incorporated in 1995, is a small-cap construction company with a market cap of Rs 1282.78 crore.
Investment rationale by Edelweiss
Asian Granito (AGL) reported mixed set of numbers while revenue growth for Q4FY18 at 18% YoY to INR3.9bn was above est of INR3.7bn, EBITDA grew by only 5% YoY to INR363mn (est INR431mn) on account of fall in margins. However, led by lower interest and depreciation, PAT increased by 8% YoY to INR168mn (est INR178mn). While volumes increased by 29% YoY; drop in revenues from trading of marble affected overall revenue growth. Further, increasing employees and gas cost has led to fall in margins by 110 bps YoY and 440 bps QoQ to 9.3%. To factor in ongoing margin pressure, we cut our FY19/20E EPS estimate by 17%/13%. AGL continues with its strategy of driving retail network to boost revenues and increasing share of value added products to support margin expansion. Reiterate ‘BUY’ with revised TP of INR625 (20x FY20EEPS; INR720 earlier).
Time period given by the brokerage is Two Year when Asian Granito India Ltd. price can reach defined target. .
Asian Granito India Ltd., incorporated in 1995, is a small-cap construction company with a market cap of Rs 1282.78 crore.
Investment rationale by Edelweiss
Asian Granito (AGL) reported mixed set of numbers while revenue growth for Q4FY18 at 18% YoY to INR3.9bn was above est of INR3.7bn, EBITDA grew by only 5% YoY to INR363mn (est INR431mn) on account of fall in margins. However, led by lower interest and depreciation, PAT increased by 8% YoY to INR168mn (est INR178mn). While volumes increased by 29% YoY; drop in revenues from trading of marble affected overall revenue growth. Further, increasing employees and gas cost has led to fall in margins by 110 bps YoY and 440 bps QoQ to 9.3%. To factor in ongoing margin pressure, we cut our FY19/20E EPS estimate by 17%/13%. AGL continues with its strategy of driving retail network to boost revenues and increasing share of value added products to support margin expansion. Reiterate ‘BUY’ with revised TP of INR625 (20x FY20EEPS; INR720 earlier).
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