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Research
Tilaknagar Industries - Volume growth subdued but profitability in line - PhillipCapital
Posted On : 2012-11-18 21:05:53( TIMEZONE : IST )
The Q2FY13 results of Tilaknagar Industries (TLNGR IN) have been marginally below our estimates at the bottom line. The results are discusses in detail in the note herein:
Key data for Q2FY13
- Top-line increase of 21.9% YoY.
- Volume growth of 1.9%-Sold 3 million cases during the quarter.
- EBIDTA per case at Rs 144, YoY increase of 6
- PAT growth at 1.
Key data for H1FY13
- Top-line increase of 31% YoY.
- Volume growth of 7.5%-Sold 6 million cases during the period.
- EBIDTA per case at Rs 137, YoY increase of 2
- PAT growth at 4.
Some highlights for the quarter
- The company' strategy to gradually and steadily moving towards premiumisation, has led to higher average realizations for the quarter leading to higher overall revenue growth.
- The focus for growth continues to be in the Southern and Eastern region.
- The industry and the company have seen volume growth in Tamil Nadu trending towards normalization and we expect the volumes to ramp up in H2FY13.
- White House Rum which was launched in Kerala in March 2012 registered impressive growth and has recorded 50000 cases in September 2012.
- CSD remained subdued, but the Company witnessed encouraging growth in the export markets.
- The company witnessed benefits of price hike received in Kerala w.e.f 01 August 2012 and also in Odisha in September 2012.
Outlook and Valuation
The current quarter performance of the company has been in-line with our estimates and we believe that the company is well on course to register robust growth during FY13E. The price increase in the important market like Kerala would boost the realizations and profitability of the company over the next few quarters. We maintain our FY13E and FY14E numbers for the company. At a CMP of Rs 64, the stock trades at 12.1x and 8.9x FY13E and FY14E EPS. We believe that the current valuations are attractive and the stock may see upside on account of growth in profitability and re-rating in the valuations over the next 3-4 quarters. We reiterate our BUY rating on the stock with the price objective retained at Rs 75.
