Result Update: GHCL Ltd - BUY - TP Rs.365 - Kotak

- GHCL's numbers were in-line with estimates, with inorganic chemical segment continued with its strong performance, while home textile business continued to disappoint. Net sales during the quarter grew 8.4% YoY to Rs7.18bn (flat QoQ), driven by growth in inorganic chemical business, the benefit of the same was partially offset by a decline in home textile performance (down 12% QoQ). EBITDA during the quarter declined 15.2% YoY to Rs1.38 bn, with an EBITDA margin of 19.2%. The company reported PAT of Rs712 mn. The sequential growth in PAT is contributed by higher other income, which is income from transportation charges from customers under GST and the run rate is likely to continue going forward. Given the tightness in the soda ash market and firm prices, the company further raised the soda ash prices by 2% in the month of February 2018, to offset the rise in input costs. Though textile business performance likely to remain subdued, we are upbeat about the performance in the soda ash segment. Looking at the financial parameter and upside in soda ash business, we continue to maintain BUY rating, with a target price of Rs365. At CMP, the stock is trading at 8.9x/7.8x/7.0x FY18E/FY19E/FY20E earnings.

Shares of GHCL LTD. was last trading in BSE at Rs.312.35 as compared to the previous close of Rs. 287.85. The total number of shares traded during the day was 199977 in over 2581 trades.

The stock hit an intraday high of Rs. 314.8 and intraday low of 287.4. The net turnover during the day was Rs. 60762719.

Source : Equity Bulls

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