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The company's main business activity is manufacturing & distributing PVC pipes & fittings, electrical switches, sockets & accessories. The company is a large scale supplier for mega projects as well as supplying for retail segments.
The below is a financial snapshot for CIND.
Company is seen recording a continues growth in revenue despite in-between hiccups. However their margins seems to be fluctuating heavily indicating the high sensitivity of the raw material prices on the margins. However year 2015/16 has been a remarkable year for the company due to highest revenue and highest margins. But taking into account the possible cost increases in the next year it is prudent to estimate a reduced margin of profitability hence a forecasted PAT of 169mn is arrived.
In terms of valuations, the stock is currently trading at a PE of 5.9x @ CMP. Evaluation based on historical PE trajectory the stock could be valued in between Rs116.70 and Rs136.70 with a mid value of Rs122.10. Based on the FY 16/17 earnings the stock could be valued between Rs109.20 and Rs127.90 with a mid value of Rs114.3. In summary based on PE platform and projected earnings the stock indicates an upside potential of at least 7% from the current price levels. However based on beta based estimation the stock should reach 124 level when the ASPI reaches 7000 in mid term.
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The below is a financial snapshot for CIND.
| Rs mn | 2011/12 | 2012/13 | 2013/14 | 2014/15 | 2015/16 | 2016/17 F |
| Revenue | 1610 | 1722 | 1636 | 2086 | 2234 | 2413 |
| Gross profit | 317 | 333 | 305 | 401 | 516 | 507 |
| GP margin | 19.7% | 19.3% | 18.6% | 19.2% | 23.1% | 21% |
| Operating profit | 151 | 144 | 101 | 180 | 260 | 241 |
| OP margin | 9.4% | 8.4% | 6.2% | 8.6% | 11.6% | 10% |
| Net Profit | 105 | 96 | 76 | 130 | 180 | 169 |
| NP margin | 6.5% | 5.6% | 4.6% | 6.2% | 8.1% | 7% |
| Equity | 1252 | |||||
| No of shares | 9.9 | 9.9 | ||||
| Share price | 70 | 62.5 | 57 | 84.9 | 85.8 | |
| EPS | 10.71 | 9.74 | 7.65 | 13.19 | 18.23 | 17.06 |
| DPS | 3 | 3 | 3 | 4.5 | 5.5 | |
| ROE | 14.4% | |||||
| ROME | 17.0% |
In terms of valuations, the stock is currently trading at a PE of 5.9x @ CMP. Evaluation based on historical PE trajectory the stock could be valued in between Rs116.70 and Rs136.70 with a mid value of Rs122.10. Based on the FY 16/17 earnings the stock could be valued between Rs109.20 and Rs127.90 with a mid value of Rs114.3. In summary based on PE platform and projected earnings the stock indicates an upside potential of at least 7% from the current price levels. However based on beta based estimation the stock should reach 124 level when the ASPI reaches 7000 in mid term.
Thanks
