For 1QFY2017, Linc Pen & Plastics Ltd (LPPL)' results have come in in line of our estimates on the top-line as well as the bottom-line front. Its top-line grew 10% yoy while on the operating front, the company reported margin improvement, primarily on account of lower raw material costs. Further, the net profit grew by ~17% yoy to Rs. 4.4cr aided by higher sales growth and a strong operating performance.
Top-line grew 10% yoy: The top-line grew by ~10% yoy to Rs. 87cr on the back of good growth in the domestic as well as the exports segment.
PAT grew ~17% yoy: On the operating front, the company reported margin expansion by 149bp yoy to 9.6%, primarily on account of lower raw material costs. The reported net profit grew by ~17% yoy to Rs. 4.4cr aided by higher sales growth and a strong operating performance.
Outlook and valuation: Going ahead, we expect LPPL to report a top-line CAGR of ~10% over FY2016-18E to ~Rs. 420cr owing to strong domestic as well as export sales. On the bottom-line front, we expect the company to report ~13% CAGR to Rs. 23cr over FY2016-18E. 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). We recommend an Accumulate rating on the stock with a target price of Rs. 283.
Shares of LINC PEN & PLASTICS LTD.-$ was last trading in BSE at Rs.262.95 as compared to the previous close of Rs. 258.15. The total number of shares traded during the day was 70022 in over 122 trades.
The stock hit an intraday high of Rs. 282 and intraday low of 258. The net turnover during the day was Rs. 18079987.