Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Union Budget
Budget 2011-2012 Home
Industry Expectations - Budget 2011-2012
Industry Reactions - Budget 2011-2012
Budget 2010-2011
Budget 2010-2011 Home
Industry Expectations - Budget 2010-2011
Industry Reactions - Budget 2010-2011
Contributor's Corner
Bonanza Portfolio
Hemant K Gupta
Krish Bhatt
S A A R T H I
Trinity Investments
Exchange Information
BSE 2009 Holidays
NSE 2009 Holidays
Investor Guide
Depository & Dematerialisation
Grievance Redressal
Investor Guide
SEBI
Trading of Securities
Transfer of Securities
Your Rights
Budget 2009-2010
Budget 2009-2010 Home
Industry Expectations - Budget 2009-2010
Industry Reactions - Budget 2009-2010
Interim Budget 2009-2010 Home
Industry Expectations - Interim Budget 2009
Budget 2008-2009
Railway Budget 2008-2009
Industry Expectations - Budget 2008
Union Budget 2008-2009
Highlights of Budget 2008-2009
Summary of Budget 2008-2009
Industry Reactions - Budget 2008
IPOs
Current IPOs
Past IPOs
IPO Subscription
Mutual Funds
Gold Exchange Traded Fund
MF Unique Holding
Forthcoming Dividends
ELSS Schemes Comparison
Tax Plans
New Fund Offers
Research
Arbitrages
Equity
Market Whispers
Tax Planning
Home
Equity Linked Savings Scheme
Post Office MIS
9% GOI Senior Citizens Savings Scheme
8% Savings (Taxable) Bonds
Kisan Vikas Patra
National Savings Certificate
Public Provident Fund
IPO News

| More

Manpasand Beverages - IPO Note - Valuation expansive; Neutral - Angel Broking

Posted On: 2015-06-23 19:51:56

Investment rationale:

Capacity expansion to trigger growth: Currently the company has three manufacturing plants having a total capacity of around 9 lakh litres per day. The company is now setting up a new manufacturing facility in Haryana/Punjab, at a capex of around Rs. 152cr, which will increase the total capacity by around 50%. Going forward, we believe this new plant will drive additional growth for the company.

A strong regional brand supported by a wide distribution network: The company has a strong brand - Mango Sip, having presence in rural and semi urban regions, ie mainly in Punjab, Bihar, Maharashtra, Gujarat, and Uttar Pradesh. Also, the company has a wide distribution network including 73 consignee agents and 654 distributors spread across 24 states in India to whom it sells directly. The company's sales and distribution network is strategically spread across different regions in India, and has an especially strong outreach in certain semi urban and rural markets.

Investment concern:

Overall slowdown in rural markets could impact discretionary spending: A major portion of the company's revenue comes from rural markets owing to the company's strong presence in these areas, backed by a wide distribution network. The Indian rural story is currently going through an adverse phase due to unseasonal rains in the recent past which impacted crops extensively, and due to lower hike in minimum support prices (MSPs), thus curtailing rural incomes. Thus, going forward, any further slowdown in rural markets could likely result in lower spending on discretionary products.

High dependency on a single brand: The company started operations with its flagship brand 'Mango Sip' in the year 1997; since then, the brand has been the largest contributor to the company's revenues. In the last three years, more than 97% of the company's revenue has been contributed by 'Mango Sip' alone.

Outlook and Valuation: MBL is highly dependent on a single brand (Mango Sip) which currently has rural and semi urban focus. Going forward, for penetrating the brand in urban markets, MBL would face stiff competition from strong existing brands like Frooti, Slice, Mangola, Pepsi, Coca cola etc.

On the price to earnings per share (EPS; post-IPO) front, the company is valued at 95x 9MFY2015 annualized numbers, while its close peer - Dabur is trading at 44x FY2015 numbers. Further, other FMCG companies like ITC and HUL are also trading at a lower multiple than MBL inspite of bigger brands in their portfolios, wide pan India distribution networks, and higher ROEs, coupled with their proven track records. Hence, we recommend NEUTRAL on the issue due to expensive valuation.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com





Other Headlines:

Indian Energy Exchange to list on Oct 23, 2017
Mahindra Logistics Limited IPO to open for subscription on Oct 31, 2017
Reliance Nippon Life Asset Management Limited's IPO to open on Wednesday, October 25, 2017
IPO Note - General Insurance Corporation of India (GIC Re): Angel Broking
General Insurance Corporation Of India - IPO Note - Arihant Capital Markets
Indian Energy Exchange - IPO Note - Angel Broking
Indian Energy Exchange Limited IPO to open for subscription on Oct 9, 2017
MAS Financials Services Ltd - On the track to excel - Angel Broking
General Insurance Corporation Of India's IPO to hit markets on Oct 11, 2017
Godrej Agrovet Limited IPO receives huge response with subscription of 90.18 times till 3:45 PM
Godrej Agrovet Limited IPO receives subscription of 33.27 times till 2:30 PM
Godrej Agrovet Limited IPO receives subscription of 4.42 times till 12:00 noon
IPO Note - MAS Financials Services Ltd: Angel Broking
Prataap Snacks Ltd to list today
IPO Note - Godrej Agrovet Limited: Angel Broking
SBI Life Insurance Company Limited to list on Oct 3, 2017
Godrej Agrovet Limited - IPO Note - Sushil Finance
MAS Financial Services Ltd's IPO to open on Oct 6, 2017
Godrej Agrovet Limited fixes IPO price band as Rs. 450 to Rs. 460
SBI Life Insurance Company Limited IPO gets subscription of 3.58 times
Godrej Agrovet Ltd IPO to hit markets on Oct 4, 2017
ICICI Lombard General Insurance Company Limited IPO receives subscription of 2.98 times
Prataap Snacks Limited - IPO Note - Angel Broking
SBI Life Insurance Co Ltd - IPO Note - Angel Broking
Matrimony.com Limited to list on Sep 21, 2017
SBI Life Insurance Company Limited IPO to hit markets on Sep 20, 2017
ICICI Lombard General Insurance Company Limited IPO to close on Sep 19, 2017
Capacit'e Infraprojects Limited IPO receives overwhelming response
Matrimony.com Limited IPO receives subscription of 4.44 times
ICICI Lombard General Insurance Company Ltd - IPO Note - Angel Broking
Capacit'e Infra projects Ltd - IPO Note - Capacit'e for towering growth - Angel Broking
Matrimony.com - IPO Note - Arihant Capital Markets
Capacit'e Infraprojects Ltd - Healthy order book with strong execution... - Geojit
Capacit'e Infraprojects Limited IPO to open for subscription on Sep 13, 2017
Matrimony.com Limited IPO to open for subscription on Sep 11, 2017
Bharat Road Network Limited IPO subscribed 1.81 times
Dixon Technologies India Limited IPO receives subscription of 117.83 times
Matrimony.com - IPO Note - Angel Broking
ICICI Lombard's IPO to hit markets on Sep 15, 2017
Bharat Road Network Ltd - IPO Note - Angel Broking
Dixon Technologies India Ltd - IPO Note - The trajectory of strong client base continues - Angel Broking
IRDAI grants in-principle approval for Reliance General Insurance IPO
Dixon Technology IPO to open for subscription on Sep 6, 2017 - Sushil Finance
Future Enterprises Ltd to divest stake in Future Supply Chain Solutions Ltd through IPO
Bharat Road Network Limited IPO to hit markets on Sep 6, 2017
HDFC updates on proposed IPO of HDFC Standard Life Insurance Company Ltd
Srei Equipment Finance plans to dilute upto 25% of its capital
Cochin Shipyard Ltd - IPO Note - Angel Broking
Security and Intelligence Services (India) Ltd - IPO Note - Angel Broking
M&M to sell part of its stake in Mahindra Logistics Ltd in IPO


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2017