Company Update: Mirza International - REDUCE - TP Rs.161 - Kotak

MIL management in Q4FY17 concall stated that company intends to double the revenue from domestic market in FY18 assuming strong contribution from new products and 20-25% growth in existing domestic brand business. The company has launched new products in sports segment and mid-range products under brand name Bondstreet. The management does not expect any major growth in exports business in FY18 due to challenging demand environment in Europe, challenges faced by retailers in US and European market, Rupee appreciation, etc. On overall basis, the management has guided for over 20% growth in FY18 revenue with 19-20% EBITDA margins. As per management, the ban on sale of cattle for slaughter at animal markets will not have any material impact on company's business as raw hides are sourced from organized slaughter houses who source cattles through agents. We are positive on long term growth story of the company based on increasing focus on domestic market with new products/brands introduced in recent time. We maintain our estimates and recommend Reduce (Vs Accumulate) rating as recent appreciation in stock price leaves limited upside over our target price of Rs 161.

Shares of MIRZA INTERNATIONAL LTD. was last trading in BSE at Rs.163.3 as compared to the previous close of Rs. 162.95. The total number of shares traded during the day was 219674 in over 2445 trades.

The stock hit an intraday high of Rs. 167 and intraday low of 162. The net turnover during the day was Rs. 36170643.

Source : Equity Bulls

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