Tree House Accessories and Education - 4QFY2013 Result Review - Angel Broking

Tree House Accessories and Education Ltd. (THEAL) reported strong set of numbers for its 4QFY2013. Top-line grew by 32.8% yoy to Rs. 29.4cr, better than our estimate of Rs. 25.2cr. EBITDA grew by 30.2% to Rs. 14.2cr while margins contracting marginally by 80bp yoy to 48.3% owing to rise in other expenses. On the back of strong top-line growth and robust operating performance, net profit grew by whooping 45.1% to Rs. 7.3cr, aided by lower interest expense. Subsequently, net profit margin too expanded from 22.9% in same quarter previous year to 25.0% in current quarter.

On annual front, top-line growth stood at 47.7% to Rs. 114cr owing to additions of total 77 pre-schools in the FY2013, marginally higher than our estimate of Rs. 110cr. EBITDA for FY2013 came in 54% higher yoy to Rs. 62cr as compared to our estimate of Rs. 59cr. EBITDA margin contracted slightly by 20bp to 54.1%. Net profit growth was at 53.3% to Rs. 33cr owing to reduced interest expense for the year. On account of consistent expansion of pre-schools, THEAL is poised to register robust growth ahead. As we rollover to FY2015E, we maintain our Buy recommendation on the stock with revised target price of Rs. 313, based on 20x PE for FY2015E earnings.

Source : Equity Bulls

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