Goodyear India - 4QCY2012 Result Review - Angel Broking

Goodyear India (CMP: Rs. 284/ TP: Rs. 304/ Upside: 7.1%)

For 4QCY2012, Goodyear India reported a lower-than-expected top-line of Rs. 384cr, marginally lower on a yoy basis from Rs. 395cr in 4QCY2011. While for the full year CY2012, revenue declined by 2% yoy to Rs. 1,486cr due to slowdown in auto industry. Increase in other expenses led to contraction of EBITDA margin by 248bp yoy from 8.7% in 4QCY2011 to 6.2% during the quarter. Consequently, net profit for the quarter declined by 20.7% to Rs. 16cr from Rs. 20cr in 4QCY2011. EBITDA margin for CY2012 contracted by 39bp to 7.1%, inspite of a decline in raw material cost, which was offset by higher employee expense. Thus, net profit for CY2012 declined by 14.9% yoy at Rs. 56cr from Rs. 66cr in CY2011.

We maintain Accumulate rating on the stock with a target price of Rs. 304 based on a target PE of 9x for CY2014E.

Source : Equity Bulls

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