On track; Maintain Buy Mayur Uniquoters ::Centrum

On track; Maintain Buy
Mayur Uniquoters (Mayur) reported total operating income of
Rs.982mn (up 9% YoY and 5% QoQ) in 4QFY13. EBIDTA margins for
the quarter came strong at 20.9%, up 141bps YoY and 366bps QoQ.
Driven by strong operating performance, reported PAT stood at
Rs.129mn for the quarter registering a growth of 16% YoY and 26%
QoQ. While demand continues to remain strong, 1HFY14E revenue
growth is likely to remain muted due to capacity constraints.
However, this is likely to be addressed by Nov’13 (new coating line
with a capacity of 7.2mn meters annually will be operational by
then). Management has guided for revenue growth of 15-20% for
FY14E and sounded confident on achieving 20%+ revenue growth
for FY15E vs. 20% YoY in FY13. Focus on high realization export
market continues, reflected from the fact that the share of exports to
overall revenues has inched up to 22% in FY13 vs. 16% in FY12. We
continue to remain positive on the stock and maintain Buy rating
with a revised target of Rs.570.

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 Strong operating performance for the quarter and FY13: During the quarter,
operating income stood at Rs.982mn (up 9% YoY and 5% QoQ). For FY13, operating
income stood at Rs.3.8bn, registering a YoY growth of 20%. During the quarter, Mayur
reported EBITDA margins of 20.9%, up 141bps YoY and 366bps QoQ. EBITDA stood at
Rs.205mn for the quarter, a growth of 17% YoY and 27% QoQ. For FY13, EBITDA stood
at Rs.691mn (up 32% YoY) and EBITDA margins at 18.1% (up 168bps YoY). For 4QFY13,
Mayur reported PAT of Rs.129mn, a growth of 16% YoY and 26%QoQ. For FY13,
reported PAT stood at Rs.436mn, registering a growth of 31%.
 Conference call highlights: 1.) Management has guided for a revenue growth of 15-
20% for FY14E and 20%+ for FY15E. 2.) Exports as a % of sales are pegged at 22% in
FY13 vs. 16% in FY12. The company is currently working on new programs with Ford
and Chrysler and these are expected to fructify in November 2013. 3.) Gross
realizations for the company stood at Rs.206 per meter in FY13 vs. Rs.200 in FY12 4.)
The current capacity stands at 23mn meters annually; the 5th coating line with an
annual capacity of 7.2mn meters is likely to be operational by Oct-Nov’13 taking the
capacity up to 30mn meters. 5.) The company has already started seeing benefits of
backward integration with the rejection rate coming down from current 10% to 6%. 6.)
During FY13, the company witnessed pressure on working capital with inventory days
moving to 40 from 33 in FY12 and receivable days to 51 from 44 in FY12. Management
also indicated about creditor’s days moving up.

 Valuations and Recommendations: At the CMP of Rs. 431, the stock is currently
trading at 9.8x FY14E EPS of Rs.43.8 and 7.9x FY15E EPS of Rs.54.3. We continue to
remain positive on the stock and maintain Buy rating with a revised target of Rs.570.