Please Share:: 
KANSAI NEROLAC PAINTS LTD (KNPL)
PRICE: RS.1900 RECOMMENDATION: BUY
TARGET PRICE: RS.2250 FY16E P/E: 25.9X
In the last 6 months, the following has emerged as positives for KNPL 1)
Falling Titanium Dioxide Prices (price have corrected by 15%) 2) Regular
price hikes taken by the company 3) Improving Auto Demand and 4)
Improvement in demand of decorative paints. Under such circumstances, we
expect the company to report strong set of numbers over FY14 to FY16E. We
estimate KNPL to report topline CAGR of 23% with improvement in margins
by 200 bps from FY14 to FY16 at 12.9% leading to earnings CAGR of 44%.
We also estimate the return ratios to improve for the company.
The stock price has increased by ~20% in the last one month and by 50% in
the last six months and currently trades at 25.6x FY16E PE. With
improvement in business environment , we now value the company at 30
times one year forward FY16E P/E which is at ~20% discount to the average
of multiple commanded by Asian Paints and Berger Paints for the last 3
years. Recommend BUY with an increased price target of Rs 2250. (Earlier Rs
1870).
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
-->
KANSAI NEROLAC PAINTS LTD (KNPL)
PRICE: RS.1900 RECOMMENDATION: BUY
TARGET PRICE: RS.2250 FY16E P/E: 25.9X
In the last 6 months, the following has emerged as positives for KNPL 1)
Falling Titanium Dioxide Prices (price have corrected by 15%) 2) Regular
price hikes taken by the company 3) Improving Auto Demand and 4)
Improvement in demand of decorative paints. Under such circumstances, we
expect the company to report strong set of numbers over FY14 to FY16E. We
estimate KNPL to report topline CAGR of 23% with improvement in margins
by 200 bps from FY14 to FY16 at 12.9% leading to earnings CAGR of 44%.
We also estimate the return ratios to improve for the company.
The stock price has increased by ~20% in the last one month and by 50% in
the last six months and currently trades at 25.6x FY16E PE. With
improvement in business environment , we now value the company at 30
times one year forward FY16E P/E which is at ~20% discount to the average
of multiple commanded by Asian Paints and Berger Paints for the last 3
years. Recommend BUY with an increased price target of Rs 2250. (Earlier Rs
1870).
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
LINK
http://www.kotaksecurities.com/pdf/dmb/MorningInsight12092014np.pdf
No comments:
Post a Comment