Essel Propack - Our prognosis of Ebidta margin not played out BUY :Emkay

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Essel Propack

Our prognosis of Ebidta margin not played out

BUY

CMP: Rs43                                        Target Price: Rs63

---

n     Essel Propack (EPL) Q1 FY12 was below expectations - Revenues up 8.4% yoy at Rs 3.6bn, EBIDTA up 2.3% at Rs 576mn and APAT up 9% at Rs 94mn.

n     Ebidta margins decline 90 bps yoy to 16% - being impacted by reduction in gross margins – our prognosis for Ebidta margin expansion has not played out.

n     Europe continues to report Ebit loss at Rs50 mn and Americas fails to report improvement in capacity utilization, thereby impacting overall performance.

n     Revise Ebidta margins assumptions and thereby revise earnings downwards by -24.6% and -16.5% for FY12E and FY13E - Retain BUY with revised target price of Rs63/Share.