Views on Linc Pen & Plastics 2QFY2016 Results: Angel Broking

Views of Mr. Amarjeet Maurya (Sr. Research Analyst – Mid Caps, Angel Broking) on Linc Pen & Plastics 2QFY2016 Results:

"Linc Pen & Plastics' (LPPL) 2QFY2016 results outperformed our estimates on the bottom-line front. The company's top-line grew by ~5% YoY to ~INR 88cr (our estimates was of ~INR 89cr), mainly due to growth in domestic and exports segment. On the operating front, the company reported margin expansion (up by 96bp YoY to 9.1%), primarily on account of lower raw material costs. The reported net profit grew by 23% YoY to ~INR 5cr (our estimates was of around ~INR 4cr) on account of strong operating performance and lower interest cost.

Going ahead, we expect LPPL to report a top-line CAGR of ~8% over FY2015-17E to ~INR 371cr owing to strong domestic as well as export sales. On the bottom-line front, we expect the company to report ~17% CAGR over FY2015-17E. This would be on account of expansion in operating margin on the back of lower material prices and higher exports, which is a high margin business. Further, the company has reduced its debt significantly, which will lead to cost saving for the company. Currently, we are positive on LPPL and recommend a BUY rating on the stock."

Shares of LINC PEN & PLASTICS LTD. was last trading in BSE at Rs.161.3 as compared to the previous close of Rs. 165. The total number of shares traded during the day was 1377 in over 4 trades.

The stock hit an intraday high of Rs. 164 and intraday low of 161.1. The net turnover during the day was Rs. 225771.

Source : Equity Bulls

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