Views on Garware Wall Ropes Ltd. 2QFY2016 Result: Angel Broking

Views of Mr. Amarjeet Maurya (Sr. Research Analyst - Mid Caps, Angel Broking) on Garware Wall Ropes Ltd. 2QFY2016 Results:

2QFY2016 Top-line below expectation, margin and bottom-line impress

"Garware Wall Ropes (GWRL)'s 2QFY2016 results outperformed our bottom-line estimates. The company's top-line grew by ~6% YoY to ~INR 214cr (which is below our estimates of ~ INR 232cr), mainly due to lower growth of ~3% in Synthetic cordage segment. However, fibre & Industrial products segment reported strong growth of ~14%. On the operating front, the company reported margin improvement (up by 188bp YoY to 12.4%), primarily on account of lower raw material costs (Key raw material for GWRL is High Density Polyethylene, Polyethylene etc which corrected by 783bp YoY) and lower employee expenses. The reported net profit grew by ~42% YoY to ~INR15.4cr (our estimates was of ~INR 12.7cr) on account of falling material prices and lower interest cost (in FY2015 the company has repaid a significant amount of its debt).

Going ahead, we expect GWRL to report a healthy top-line owing to strong domestic as well as export sales. On the domestic front, we expect demand to pick up due to growth in agriculture and fisheries segments in the country. Further, we expect the company to continue reporting strong numbers on back of higher demand for aquaculture and sports products globally and also with the company tapping new geographies. We are positive on the stock."

Shares of GARWARE-WALL ROPES LTD. was last trading in BSE at Rs.344.9 as compared to the previous close of Rs. 370.4. The total number of shares traded during the day was 70522 in over 3044 trades.

The stock hit an intraday high of Rs. 386.9 and intraday low of 333.4. The net turnover during the day was Rs. 25680963.

Source : Equity Bulls

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