Linc Pen & Plastics Ltd (LPPL) 3QFY2016 Results: Angel Broking

Views of Mr. Amarjeet Maurya (Sr. Research Analyst- Mid Caps, Angel Broking) on Linc Pen & Plastics Ltd (LPPL) 3QFY2016 Results:

Results below estimates

"Linc Pen & Plastics Ltd (LPPL) 3QFY2016 results have come in below our estimates. The company's top-line grew by ~5% YoY to ~INR 72cr (our estimates was of ~INR 75cr), mainly due to lower growth in the domestic as well as the exports segment. On the operating front, the company reported a margin expansion (up by 46bp YoY to 8.9%), primarily on account of lower raw material costs. The reported net profit grew by ~4% YoY to INR 3.3cr (our estimate was of ~INR 3.6cr) on account of lower sales growth and higher tax rate.

Going ahead, we expect LPPL to report a top-line CAGR of ~8% over FY2015-17E to ~INR 371cr owing to strong domestic as well as export sales. On the bottom-line front, we expect the company to report ~17% CAGR over FY2015-17E. This would be on account of expansion in operating margin on the back of lower material prices and higher exports, which is a high margin business. Further, the company has reduced its debt significantly, which will lead to cost saving for the company. We have a NEUTRAL rating on the stock since all the positives are factored in the stock price."

Shares of LINC PEN & PLASTICS LTD.-$ was last trading in BSE at Rs.199 as compared to the previous close of Rs. 192.3. The total number of shares traded during the day was 2241 in over 59 trades.

The stock hit an intraday high of Rs. 202.9 and intraday low of 192. The net turnover during the day was Rs. 436082.

Source : Equity Bulls

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