Garware Wall Ropes - 3QFY2017 Result Update - Angel Broking

For 3QFY2017 Garware Wall Ropes (GWRL) posted results which outperformed our estimates on the bottom-line front, while the top-line was in-line with our estimates. On the operating front, the company reported margin improvement, primarily on account of lower other expenditures. Further, on the bottom-line front, the company reported strong growth on account of a favorable operating performance.

Top-line grew by ~5%: The company's top-line grew by ~5% yoy to Rs. 195cr mainly due to growth of 6% yoy in the Synthetic cordage segment to Rs. 165cr. However, Fibre & Industrial products segment reported de-growth of ~4% yoy to Rs. 33cr. Further, the company has seen strong growth in fisheries and aquaculture business during the quarter.

Profitability boosted by strong operating performance: On the operating front, the company reported margin improvement (up 193bp yoy to 15.2%), primarily on account of decline in other expenditures during the quarter. The reported net profit grew by ~22% yoy to Rs. 18cr on account of the strong operating performance.

Outlook and valuation: Going ahead, we expect GWRL to report a healthy top-line in anticipation of strong domestic as well as export sales. On the domestic front, we expect demand to pick up with an expected growth in the agriculture and fisheries segments in the country. Further, we expect the company to continue reporting strong numbers on the back of higher demand for aquaculture and sports products globally coupled with with the company tapping new geographies. Hence, we recommend a Buy rating on the stock with a target price of Rs. 710.

Shares of GARWARE-WALL ROPES LTD. was last trading in BSE at Rs.622 as compared to the previous close of Rs. 604.15. The total number of shares traded during the day was 1164 in over 108 trades.

The stock hit an intraday high of Rs. 622 and intraday low of 602. The net turnover during the day was Rs. 713309.

Source : Equity Bulls

Keywords