CHHOTA (to) MOTA ideas: Eveready Industries Ltd - BUY - TP Rs.522 - Kotak

- We initiate coverage on Eveready Industries India Ltd (EVRL) with 'BUY' rating and a target price of Rs 522 based on DCF based valuation methodology. We believe that EIIL valuations can get rerated on back of strong growth in company's estimated consolidated profits through FY17-19E driven by 1/ exponential growth in consumer appliance segment supported by distribution expansion and new product launches. 2/ sustenance in demand for batteries in the domestic market and company retaining its leadership position in the segment and 3/ market share gain in lighting & flashlight business. We project 16.5% CAGR between FY17-19 in consolidated profits from Rs.936 mn in FY17 to Rs 1.27 Bn in FY19E. At current price of Rs 373, EIIL stock is trading attractive at 14.5x EV/EBITDA and 21.3x P/E on FY19E earnings.

Shares of EVEREADY INDUSTRIES INDIA LTD. was last trading in BSE at Rs.371.75 as compared to the previous close of Rs. 368.1. The total number of shares traded during the day was 16480 in over 695 trades.

The stock hit an intraday high of Rs. 381.6 and intraday low of 365.05. The net turnover during the day was Rs. 6150277.

Source : Equity Bulls

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