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F a b r i c s e g m e n t a i d s t o p l i n e g r o w t h …
Bombay Rayon Fashions’ (BRFL) Q1FY12 sales increased 20.1% YoY to
| 603.8 crore as against our estimate of | 493.1 crore. This growth was
driven by a 40% growth in the fabric segment (26% volume growth and
14% value growth). On the other hand, the garment segment de-grew by
4% on the back of a 6% dip in realisation. The company was unable to
pass on the impact of the imposition of excise duty and hence margins
shrank by 67 bps YoY to 24.8%, marginally higher than our estimate of
24.2%. Absolute EBITDA increased 17% YoY to | 149.7 crore. However,
due to higher interest and depreciation costs PAT growth was a tepid
8.9% YoY to | 56.8 crore (I-direct estimate: | 52.5 crore).
ƒ Segmental performance
Fabric: BRFL’s fabric segment aided the strong topline growth;
fabric sales increased from 20.8 mn meters in Q1FY11 to 26.2 mn
meters in Q1FY12. Realisations also increased from | 112/meter to
| 128/meter. Going forward we expect the same to increase to | 135
in FY12E and marginally dip to | 133 in FY13E.
Garments: Volumes increased from 9.9 mn pieces in Q1FY11 to 10.1
mn pieces in Q1FY12. However, realisation slipped from | 273 per
piece to | 256 per piece. Going forward we expect the same to
increase to | 260 per piece in FY12E and | 270 per piece in FY13E.
V a l u a t i o n
BRFL is trading at 13.5x FY12E and 10.4x FY13E EPS of | 22.7 and | 27.0
respectively. We expect BRFL’s revenues and net profit to register a
CAGR of 24.6% and 25.3%, respectively, over FY11-FY13E. The stock has
appreciated significantly on the news of the open offer which has been
deferred. We continue to reiterate our view that investors holding the
stock should book profits. We have valued the stock at 9x FY13E earnings
of | 27.0 and arrived at a target price of | 243. We reiterate our SELL
rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
F a b r i c s e g m e n t a i d s t o p l i n e g r o w t h …
Bombay Rayon Fashions’ (BRFL) Q1FY12 sales increased 20.1% YoY to
| 603.8 crore as against our estimate of | 493.1 crore. This growth was
driven by a 40% growth in the fabric segment (26% volume growth and
14% value growth). On the other hand, the garment segment de-grew by
4% on the back of a 6% dip in realisation. The company was unable to
pass on the impact of the imposition of excise duty and hence margins
shrank by 67 bps YoY to 24.8%, marginally higher than our estimate of
24.2%. Absolute EBITDA increased 17% YoY to | 149.7 crore. However,
due to higher interest and depreciation costs PAT growth was a tepid
8.9% YoY to | 56.8 crore (I-direct estimate: | 52.5 crore).
ƒ Segmental performance
Fabric: BRFL’s fabric segment aided the strong topline growth;
fabric sales increased from 20.8 mn meters in Q1FY11 to 26.2 mn
meters in Q1FY12. Realisations also increased from | 112/meter to
| 128/meter. Going forward we expect the same to increase to | 135
in FY12E and marginally dip to | 133 in FY13E.
Garments: Volumes increased from 9.9 mn pieces in Q1FY11 to 10.1
mn pieces in Q1FY12. However, realisation slipped from | 273 per
piece to | 256 per piece. Going forward we expect the same to
increase to | 260 per piece in FY12E and | 270 per piece in FY13E.
V a l u a t i o n
BRFL is trading at 13.5x FY12E and 10.4x FY13E EPS of | 22.7 and | 27.0
respectively. We expect BRFL’s revenues and net profit to register a
CAGR of 24.6% and 25.3%, respectively, over FY11-FY13E. The stock has
appreciated significantly on the news of the open offer which has been
deferred. We continue to reiterate our view that investors holding the
stock should book profits. We have valued the stock at 9x FY13E earnings
of | 27.0 and arrived at a target price of | 243. We reiterate our SELL
rating on the stock.
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