VST Industries Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Gross revenues for the quarter grew 4.0% YoY against our estimate of 8.4% to | 574.2 crore. Cigarette sales increased 16.0% YoY to | 524 crore led by realisation improvement; cigarette volume for the quarter declined 0.5% YoY. Excise duty increased 22.8% YoY due to two months of additional excise duty levy of 6% post Budget and change in sales mix in favour of above 64 mm sticks. Unmanufactured tobacco sales fell 50% YoY to | 50 crore. Thus, net sales fell 15.7% YoY to | 227.0 crore (I-direct estimate: | 261.2 crore)...

ICICI Securities Ltd | Retail Equity Research VST Industries reported a strong set of results with net sales increase of 8.1% YoY to | 233.9 crore (I-direct estimate: | 213.2 crore). Cigarette segment gross sales were ~| 500 crore whereas tobacco sales in the quarter were at ~| 65 crore. Cigarette volumes for the quarter as well as for the nine months were flat The 64 mm cigarette contribution during the quarter was 57%, whereas the rest was contributed by 69 mm category. EBITDA...

Net sales came in at | 229.8 crore, up 13% YoY (I-direct estimate: | 246.7 crore). Volumes have declined by ~2% YoY during the quarter and have remained flat in H1FY17. However, realisation growth has been to the tune of ~13-14% in Q2FY17. Raw tobacco sales has increased marginally to | 55 crore during the quarter. Volume contribution from 64 mm category has been ~55% while company has launched king size cigarette Addition at a | 10 / stick price point in Hyderabad city and the company has also launched...

VST Industries recorded strong 33.3% growth in topline led by ~70% jump in raw tobacco sales & ~16% growth in cigarette sales. Excise outgo this quarter increased ~13% to | 320 crore mainly due to 10% increase in excise duty in 2016 Budget • Cigarettes volume growth witnessed uptick to 4% mainly on the back significant volume decline in base quarter & moderate excise hike of 10% in 2016 Budget. Volume contribution from 64 mm category was 60% during the quarter. We changed our volume estimate from 2% to 4% in FY17E & from 1% to 2% in FY18E on account of low base effect created by significant decline in cigarettes volumes by 7% in FY15 & 3% in FY16. ICICI Securities Limited value the stock at 18x FY18E EPS of | 135.4 & arrive at a target price of | 2437/share with a BUY recommendation on the stock.

ICICI Securities Ltd | Retail Equity Research In Union Budget 2016-17, the excise duty has been increased by 10% across categories vs. our expectation of 7%. Considering that excise duty...