Views on Indag Rubber 1QFY2016 Results - Angel Broking

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

Recovery continues in 1QFY2016, but at a slower pace.

"For 1QFY2016, Indag Rubber (IRL)'s reported a top-line growth of 10.3% yoy to ~INR 64cr (slightly below our expectation of ~INR 68cr). However, we are seeing volume improvement since the last three quarters on the back of improvement in industrial activity in the country. Higher utilization in the transportation segment led to higher sales growth in retreading products. On the operating front, the company reported margin improvement (OPM up by 170bp yoy to 18.0%); the operating profit was up ~22% yoy, primarily on account of lower raw material costs (prices of natural rubber and crude based raw materials were soft during the quarter). This led to a decent net profit growth of ~16% yoy to ~INR 8cr (our estimate was of ~INR 7.5cr).

Going ahead, we expect IRL to report a healthy top-line growth owing to recovery in commercial vehicle (CV) volumes in the domestic market. However, on the bottom-line front, we are not expecting strong growth as the excise duty benefits would subside post FY2016, thus impacting the earnings. Hence we are Neutral on stock."

Shares of INDAG RUBBER LTD. was last trading in BSE at Rs.199.9 as compared to the previous close of Rs. 199.9. The total number of shares traded during the day was 29765 in over 248 trades.

The stock hit an intraday high of Rs. 202 and intraday low of 198. The net turnover during the day was Rs. 5953780.

Source : Equity Bulls

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