Views on LG Balakrishnan & Bros 2QFY2016 Results: Angel Broking

Views of Mr. Amarjeet Maurya (Sr. Research Analyst - Mid Caps, Angel Broking) on LG Balakrishnan & Bros 2QFY2016 Results:

"LG Balakrishnan & Bros' reported slightly better than expected standalone top-line and bottom-line growth for 2QFY2016. The top-line grew by ~6% YoY to ~INR 282cr, which is higher than our estimate of ~INR 267cr. The Transmission segment revenue was up ~11% YoY; the segment accounts for ~79% of the standalone revenue of the company. The Other segment reported de-growth in sales. The company reported an operating profit of ~INR 36cr, which is down 0.2% YoY. The operating margin contracted by 74bp YoY to 12.8%, primarily on account of higher employee costs and other expenditure. The reported standalone net profit de-grew by ~19% YoY to ~INR 17cr, but is higher than our estimate of ~INR 16cr. However, on adjusting for the one-time exceptional gain incurred in 2QFY2015, the PAT during 2QFY2016 actually grew by 5% YoY. Considering that the company draws a fair amount of its business from the two-wheeler segment and with the segment currently underperforming due to a rural slowdown, we retain our NEUTRAL rating on the stock."

Shares of L.G.BALAKRISHNAN & BROS.LTD. was last trading in BSE at Rs.485.3 as compared to the previous close of Rs. 483.6. The total number of shares traded during the day was 1209 in over 62 trades.

The stock hit an intraday high of Rs. 486.9 and intraday low of 478.5. The net turnover during the day was Rs. 585559.

Source : Equity Bulls

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