Please Share:: 
We had recommended HSIL Ltd in portfolio at Rs 140 with target price of Rs 180.
Thereafter, we initiated coverage on HSIL Ltd at price of Rs 215 on 23rd May 2014,
with BUY rating and target price of Rs 278 per share. On outperformance in FY14
results, we upgraded our target price to Rs 330 per share. Our target of Rs 330 per
share was achieved on 2nd September 2014 which was further revised to Rs 425. On
10th October 2014 target price of Rs 425 was also achieved. Our key investment
rationale for recommending HSIL were: 1) Thrust on premiumisation in building
products 2) packaging products segment expected to return to black 3) focus on
better sanitation levels due to increasing disposable household income and rapid
urbanisation and 4) improving financial performance. In our opinion, these levers
are still in place. Due to increasing focus of government and corporates on better
sanitation levels in the country, the growth visibility has improved. Even on packaging
products segment, the losses are reducing.
At CMP of Rs 402, the stock trades at 24.5x and 15.8x its FY15E and FY16E earnings
of Rs 16.4 and Rs 25.5 per share respectively. Despite the sharp run-up in share
price post Q1FY15 results, the valuation appears attractive. Its key competitor Cera
Sanitaryware Ltd trades at PE of 25.2x its FY16E Bloomberg consensus earnings
estimate. However, we would wait till Q2FY15E results to revise our target price.
Currently we maintain our SOTP based target price of Rs 425 and revise the rating
to HOLD.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
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We had recommended HSIL Ltd in portfolio at Rs 140 with target price of Rs 180.
Thereafter, we initiated coverage on HSIL Ltd at price of Rs 215 on 23rd May 2014,
with BUY rating and target price of Rs 278 per share. On outperformance in FY14
results, we upgraded our target price to Rs 330 per share. Our target of Rs 330 per
share was achieved on 2nd September 2014 which was further revised to Rs 425. On
10th October 2014 target price of Rs 425 was also achieved. Our key investment
rationale for recommending HSIL were: 1) Thrust on premiumisation in building
products 2) packaging products segment expected to return to black 3) focus on
better sanitation levels due to increasing disposable household income and rapid
urbanisation and 4) improving financial performance. In our opinion, these levers
are still in place. Due to increasing focus of government and corporates on better
sanitation levels in the country, the growth visibility has improved. Even on packaging
products segment, the losses are reducing.
At CMP of Rs 402, the stock trades at 24.5x and 15.8x its FY15E and FY16E earnings
of Rs 16.4 and Rs 25.5 per share respectively. Despite the sharp run-up in share
price post Q1FY15 results, the valuation appears attractive. Its key competitor Cera
Sanitaryware Ltd trades at PE of 25.2x its FY16E Bloomberg consensus earnings
estimate. However, we would wait till Q2FY15E results to revise our target price.
Currently we maintain our SOTP based target price of Rs 425 and revise the rating
to HOLD.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
LINK
http://www.indianivesh.in/Admin/Upload/635487888112353750_NiveshDaily%20-%2013%20October%202014.pdf
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