Prabhat Dairy Ltd.

NSE: PRABHAT | BSE: 539351 | ISIN: INE302M01033 | Industry: Packaged Foods
| Momentum Trap

Prabhat Dairy Ltd.
Prabhat Dairy Ltd.
21 May 2018
Emkay
Gross margin expanded by 450bps due to lower milk prices (down 25%) and better product mix. However, EBITDA margin expanded by 200bps due to higher other expenditure (up 38%). The management continues to focus on increasing contribution from the B2C business with distribution expansion and new product launches. The company has launched exclusive branded outlets in tier II & III cities to create brand awareness and improve distribution. Over FY18-20, we expect revenue to grow at 13% CAGR, margin to expand by 120bps and ROCE improvement owing to better capacity utilization. We value Prabhat at 20x FY20E earnings with Target Price of Rs200. Maintain Accumulate....
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