Views on Garware Wall Ropes 1QFY2016 Results - Angel Broking

Views of Mr. Amarjeet Maurya (Sr. Research Analyst - Mid Caps, Angel Broking) on Garware Wall Ropes 1QFY2016 Results:

1QFY2016 numbers outperform estimates

"Garware Wall Ropes (GWRL)'s 1QFY2016 results outperformed our estimates. The company's top-line grew by a healthy ~20% yoy to ~INR 239cr (our estimates was of ~ INR 213cr), mainly due to healthy growth in Synthetic cordage and fibre & Industrial products segment. On the operating front, the company reported margin improvement (up by 111bp yoy to 10.8%), primarily on account of lower employee and other expenses. Notably, raw material costs have not declined (Key raw material for GWRL is High Density Polyethylene, Polyethylene etc). We believe recent correction in raw material price should get reflected in the coming quarters. The reported net profit grew by 50% yoy to ~INR15cr (our estimates was of ~INR 11cr) on account of healthy sales growth, strong operating performance and lower interest cost (in FY2015 the company has repaid a significant amount of its debt).

Going ahead, we expect GWRL to report a healthy top-line owing to strong domestic as well as export sales. On the domestic front, we expect demand to pick up due to growth in agriculture and fisheries segments in the country. Further, going forward, we expect the company to continue reporting strong numbers on back of higher demand for aquaculture and sports products globally and also with the company tapping new geographies. We are positive on GWRL and recommend a Buy rating on the stock."

Shares of GARWARE-WALL ROPES LTD. was last trading in BSE at Rs.306.4 as compared to the previous close of Rs. 313.7. The total number of shares traded during the day was 211851 in over 6256 trades.

The stock hit an intraday high of Rs. 332.2 and intraday low of 299. The net turnover during the day was Rs. 67283102.

Source : Equity Bulls

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