Result Update: Eveready Industries India Ltd - BUY - TP Rs.310 - Kotak

- EIIL Q2FY19 PAT outperformed our estimates, company posted operating margin higher than our estimate driven by lower employee cost. Q2FY19 revenue estimate was largely in line with our estimates. We believe that most of the challenges are close to get sorted and situation across verticals have largely stabilized now signaling bottoming out of margins.

Key Highlights

- EIIL reported revenue decline of 3.7% y/y, reported at Rs 3.8 Bn in Q2FY19 due to marginally weaker sales in lighting/battery segments.

- On normalized basis, company has maintained operating margins on y/y basis.

Valuation & outlook

- Broadly maintain FY19/20 forecasts (tweak FY20 margin to build higher distribution cost) and DCF assumptions, we recommend 'BUY' with revised target price of Rs 310 (Rs 322 earlier).

Shares of EVEREADY INDUSTRIES INDIA LTD. was last trading in BSE at Rs.202.05 as compared to the previous close of Rs. 191.05. The total number of shares traded during the day was 13541 in over 353 trades.

The stock hit an intraday high of Rs. 205.6 and intraday low of 194.7. The net turnover during the day was Rs. 2737377.

Source : Equity Bulls

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