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View Full Version : Garware-Wall Ropes Ltd (NSE:GARWALLROP) (BSE:509557)



SMR
08-12-2015, 08:34 AM
Garware Wall Ropes Ltd is an India-based Company that provides application focused solutions for various sectors including deep-sea, fishing, aquaculture, shipping, agriculture, sports, infrastructure, defense and transportation. The Company has three integrated manufacturing facilities in Pune, Wai and Silvassa where variety of products are produced, including ropes, nets and aquaculture cages for capturing and breeding fish; nets for sports such as tennis and soccer; insect and shade nets for high-value agriculture; coated fabrics for covers, tarps, tents etc; and geosynthetic solutions for water management, waste management and erosion control applications. Business segments include Synthetic Cordage, and Fibre and Industrial Products & Projects.

Official Website: www.garwareropes.com

SMR
08-12-2015, 08:35 AM
For 1QFY2016, Garware Wall Ropes (GWRL)’s results have come in above our estimates. The company’s top-line for the quarter grew by 20% yoy to Rs239cr. On the operating front, the company reported margin improvement, primarily on account of lower employee and other expenses. Notably, raw material costs have not declined; the key raw materials for GWRL are High Density Polyethylene, Polyethylene etc. We believe the recent correction in raw material prices should get reflected in the coming quarters. Further, on the bottom-line front, the company reported strong growth. Strong segmental performance boosts overall top-line: For the quarter, GWRL’s top-line grew by a healthy ~20% yoy to ~Rs239cr (our estimate was of ~ Rs213cr), mainly due to healthy growth in Synthetic cordage (up ~17% to Rs195cr) and Fibre & Industrial products (up ~22% to Rs49cr) segments. PAT grew ~50% yoy: GWRL posted a net profit growth of ~50% yoy to ~Rs15cr, owing to strong revenue growth and operating performance. Further, lower interest cost also boosted the profitability. Outlook and valuation: Going ahead, we expect GWRL to report a top-line CAGR of ~12% over FY2015-17E to ~Rs983cr owing to strong domestic as well as export sales. On the bottom-line front, we expect the company to report ~18% CAGR over FY2015-17E on account of expansion in operating margin (due to lower material prices and higher exports which is a high margin business). Further, the company has reduced its debt significantly which will lead to cost savings. At the current market price, GWRL trades at a P/E of 11.3x its FY2017E EPS. Hence, we recommend a Buy rating on the stock with a target price of Rs390.

Source: http://www.angelbroking.com/