Bodal Chemicals Ltd - Result Update - REDUCE - TP Rs.176 - Kotak

- Bodal chemicals (BCL) reported standalone net sales of Rs2.63 bn and PAT of Rs262 mn. EBITDA during the quarter came in at Rs464mn (vs estimates of Rs457mn), with an EBITDA margin of 17.7% (vs estimate of 16.3%). Revenue during the quarter was down on account of lower volume due to GST implementation, particularly affecting the textile sector (major client) and price moderation. Vinyl Sulphone (VS) and H-acid prices during the quarter stood in the range of Rs235/kg and Rs345/kg, respectively. The company has started witnessing demand from the textile sector, which would help the company to report volume growth, but we expect prices to remain subdued in the near term, due to rupee appreciation and seasonally low period starting from the month of Dec to Feb 2018 approaching, thereby affective the overall revenue growth. Besides this, increase in cost would also weigh on EBITDA margin. During the quarter, the company raised Rs2.25bn through QIP. We have revised our EPS estimates downwards to Rs10.8 and Rs13.3 for FY18E and FY19E, respectively factoring dilution. At CMP, the stock is trading at 12.8x FY19E earnings, which in over view is fairly valued. Hence, we recommend REDUCE (earlier BUY) rating, with a revised target price of Rs176 (earlier Rs200)

Shares of BODAL CHEMICALS LTD. was last trading in BSE at Rs.158.95 as compared to the previous close of Rs. 158.2. The total number of shares traded during the day was 57885 in over 942 trades.

The stock hit an intraday high of Rs. 162.15 and intraday low of 157.45. The net turnover during the day was Rs. 9255347.

Source : Equity Bulls

Keywords