Vesuvius India - 1QCY2013 Review - Angel Broking

For 1QCY2013, VIL reported a 4% yoy increase in topline to Rs. 145cr, inline with our estimate of Rs. 144cr. The EBITDA margin surprised positively reporting an expansion of 558bp yoy to 20.2% from 14.6% in 1QCY2012 primarily due to decline in raw material costs. As a result, net profit grew by a stupendous 52.6% yoy to Rs. 18cr in 1QCY2013 as compared to Rs. 12cr in same quarter last year. We believe the decline in commodity prices would facilitate higher margins for the rest of the year, inspite of 6.4% CAGR in revenue over CY2012-14E; thus leading to better profitability.

Hence, we upgrade the stock to Buy rating with a target price of Rs. 439 based on a target PE of 12x for CY2014E.

Source : Equity Bulls

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