Buy BSL Ltd For Target Rs.48.00 - Firstcall Research Ltd

SYNOPSIS

*  BSL Ltd. which is one of the prominent members of the US$ 900 million LNJ Bhilwara Group, is currently producing over 18 million meters of fabric every year.

*  In Q2 FY15, Net profit jumps to Rs. 24.90 million an increase of 47.34% against Rs. 16.90 million in the corresponding quarter of previous year.

*  The company’s net sales registered 16.61% increase and stood at a record Rs. 1007.90 million from Rs. 864.30 million over the corresponding quarter of previous year.

*  Operating profit is Rs. 118.20 million as against Rs. 100.30 million in the corresponding period of the previous year.

*  Profit before tax (PBT) at Rs. 22.70 million in Q2 FY15 compared to Rs. 15.50 million in Q2 FY14, registered a growth of 46.45%.

*  The company has reported an EPS of Rs. 2.42 for the 2nd quarter as against an EPS of Rs. 1.64 in the corresponding quarter of the previous year.

*  For half year end of FY15, the company registered a growth of 24.64% in Net sales to Rs. 1927.90 million from Rs. 1546.80 million for half year ended of FY14.

*  Net profit grew by 49.17% to Rs 27.00 million for the end of H1 FY15 from Rs 18.10 million for the end of H1 FY14.

*  Net Sales and Operating Profit of the company are expected to grow at a CAGR of 17% and 16% over 2013 to 2016E respectively.

 

QUARTERLY HIGHLIGHTS (PARENT BASIS)

Results updates- Q2 FY15,

BSL Ltd. which is one of the prominent members of the US$ 900 million LNJ Bhilwara Group, is currently producing over 18 million meters of fabric every year, has reported its financial results for the quarter ended 30th September, 2014.

The company has achieved a turnover of Rs. 1007.90 million for the 2nd quarter of the current year 2014-15 as against Rs. 864.30 million in the corresponding quarter of the previous year. EBITDA of Rs. 118.20 million in Q2 FY15, an increase of 17.85% against the corresponding period of last year. In Q2 FY15, net profit of Rs. 24.90 million against Rs. 16.90 million in the corresponding quarter of the previous year. The company has reported an EPS of Rs. 2.42 for the 2nd quarter as against an EPS of Rs. 1.64 in the corresponding quarter of the previous year.

 

OUTLOOK AND CONCLUSION

*  At the current market price of Rs. 38.50, the stock P/E ratio is at 7.61 x FY15E and 5.86 x FY16E respectively.

*  Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.5.06 and Rs.6.57 respectively.

*  Net Sales and Operating Profit of the company are expected to grow at a CAGR of 17% and 16% over 2013 to 2016E respectively.

*  On the basis of EV/EBITDA, the stock trades at 3.77 x for FY15E and 3.26 x for FY16E.

*  Price to Book Value of the stock is expected to be at 0.55 x and 0.50 x respectively for FY15E and FY16E.

*  We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs.48.00 for Medium to Long term investment.
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