Views on Banco Products India Ltd 2QFY2016 Results: Angel Broking

Views of Mr. Milan Desai (Research Analyst - Mid Caps, Angel Broking) on Banco Products India Ltd 2QFY2016:

2QFY2016 Results above expectation on all fronts

"For 2QFY2016, Banco has posted a good set of numbers. The Consolidated top-line has grown by 5.8% yoy to INR 329cr, against our expectation of INR 320 cr. The operating performance has improved led by 238bp yoy decline in raw material cost to 51.8% of sales and employee expense declining by 137bp yoy to 12.3% of sales. The other expenses have increased by 194bp YoY to 23.2% of sales resulting in 181bp YoY expansion in EBITDA margin to 12.6%. We had built in an estimate of 12.1%. The other income was lower as last year the company has received the proceeds from the sale of cement business. Adjusting for that the bottom-line grew by 40.7% YoY to INR 25cr vis-à-vis our estimate of INR 24cr.

The company had been facing issues in the past year in terms of subdued environment in Europe affecting its Netherland subsidiary, which accounts for 33.0% of total top-line and Euro depreciation against the Rupee adding to the assault. There have been a slew of management changes within the company over the past year. We maintain our Neutral rating on the stock as we await more clarity from the company and the new management."

Shares of BANCO PRODUCTS (INDIA) LTD.-$ was last trading in BSE at Rs.129.8 as compared to the previous close of Rs. 131.1. The total number of shares traded during the day was 79635 in over 1602 trades.

The stock hit an intraday high of Rs. 137.8 and intraday low of 128.4. The net turnover during the day was Rs. 10594756.

Source : Equity Bulls

Keywords