Goodyear India - Q1CY13 Result Review - Angel Broking

For 1QCY2013, Goodyear reported a better-than-expected top-line of Rs. 337cr, marginally higher on a yoy basis from Rs. 331cr in 1QCY2012. A decline in raw material cost led to an expansion of the EBITDA margin by 302bp yoy from 6.0% in 1QCY2012 to 9.0% in 1QCY2013. This margin expansion coupled with higher other income led to a stupendous growth in net profit of 90.6% yoy to Rs. 21cr from Rs. 11cr in 1QCY2012. Though a slowdown in auto industry is expected to keep revenue growth restrained, we believe lower rubber prices would help growth in net profit, going forward.

Hence, we upgrade the stock to Buy with a revised target price of Rs. 352 based on a target PE of 8x for CY2014E.

Source : Equity Bulls

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