Views on Styrolution 1QCY2014 results - Angel Broking

Views of Ms. Twinkle Gosar ( Equity Research Associate - Midcaps, Angel Broking) on Styrolution 1QCY2014 results:

Despite top-line surprise, EBITDA disappoints profoundly

"Styrolution ABS Ltd. (Styrolution) a leading manufacturer of an engineering plastic (ABS and SAN); reported disappointing set of numbers for 1QCY2014. Top line for the quarter grew by 23.7% yoy to Rs. 299cr, higher by 13.0% as compared to our estimate of Rs. 265cr. However, EBITDA plunged by 59.4% yoy and came in at Rs. 10cr, while margins contracted by 650bp yoy to 3.2% owing to 745bp yoy higher raw material cost as percentage of sales. Consequently, net profit dip by 60.1% to Rs. 6cr, 64% lower than our expectation of Rs. 16cr. Meanwhile, Ms. Anke Frankenberger has been appointed as a Non-Executive Additional Director on the Board of the Company effective April 29, 2014. Considering ABS's long persisting domestic demand supply gap, we expect the revival in the economy to aid growth for the company until then we recommend Neutral rating on the stock."

Shares of STYROLUTION ABS (INDIA) LTD. was last trading in BSE at Rs.454 as compared to the previous close of Rs. 461.55. The total number of shares traded during the day was 2042 in over 367 trades.

The stock hit an intraday high of Rs. 468 and intraday low of 445.2. The net turnover during the day was Rs. 921447.

Source : Equity Bulls

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