Result Update: Bodal Chemicals Ltd - ACCUMULATE - TP Rs.164 - Kotak

Bodal chemicals (BCL) reported standalone net sales of Rs3.04 bn (higher than estimates) and PAT of Rs305 mn (in line with estimates). EBITDA during the quarter came in at Rs526mn, with an EBITDA margin of 17.3%. The sequential growth in revenue was on account of normalized offtake by textile segment post the GST disruptions. The revenue recovery has taken place in 3Q and we expect the momentum to continue in the coming quarters as well. But the same will not be able to offset the impact of lower sales in 1HFY18. Hence, management expects the revenue for FY18E to be largely flat or lower 3-5%. We have revised our assumptions factoring the 9MFY18 performance and realisation. Our revised estimates for FY18E and FY19E stands at Rs8.8 (earlier Rs.10.8) and Rs10.8 (earlier Rs.13.3), respectively and introducing FY20E earnings with Rs12.6. At CMP, the stock is trading at 13.9x/12x FY19E/FY20E earnings, which in our view is fairly valued. Hence, we recommend ACCUMULATE (earlier REDUCE) rating, with a revised target price of Rs164 (earlier Rs176), valuing it at 13x FY20E earnings.

Shares of BODAL CHEMICALS LTD. was last trading in BSE at Rs.142.6 as compared to the previous close of Rs. 144.25. The total number of shares traded during the day was 21234 in over 450 trades.

The stock hit an intraday high of Rs. 145.5 and intraday low of 142.5. The net turnover during the day was Rs. 3057082.

Source : Equity Bulls

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