Tamilnadu Newsprint - Q3FY12 Result Update - Emkay

Reco: ACCUMULATE
CMP: Rs 93
Target Price: Rs 110

Disappointing results; trim estimates

- Q3FY12 results disappointed due to lower sales volumes & higher input cost. Sales increased by 13%yoy to Rs 3.1 bn. EBITDA margin declined by 700bps yoy/900bps qoq to 19.1%.

- TNPL reported adjusted loss of Rs 177mn against est of profit of Rs 22mn. APAT has been adjusted for EO gain of Rs 1bn (tax adjusted Rs 812mn) on forward currency contract.

- Inventory builtup to the tune of ~60,000mt is a key concern which is likely to put pressure on near term realisations and EBITDA margins

- Due to weak Q3FY12 results we have reduced our FY EPS est to Rs 1.3 (from Rs 9.1). On back of compelling valuations (40% discount to BV) we maintain Accumulate.

Source : Equity Bulls

Keywords