The 2 reports from 1 analysts offering long term price targets
for La Opala RG Ltd. have an average target of 240.00. The consensus estimate
represents an upside of 6.31%
from the last price of 225.75.
Revenue declined by ~38% YoY whereas EBITDA was down ~55% YoY. Sequentially, revenue grew by ~320% on account of recovery in general trade and e-commerce. Modern CMP: Rs207 trade outlook remains weak in the near term as the Future Group was a key player for LOG (ex-Future, business has shown some recovery in 2QFY21). As business was not operating Target Price: Rs240 at optimum capacity, profitability numbers are not comparable; we give more weightage to Upside: 16% sequential improvement. Utilisation was up at ~60% (2QFY21) vis--vis June'20 exit utilisation of ~30%. We highlight that along with volume recovery, LOG witnessed positive Abhishek Navalgund growth in realisation. The management indicated that Oct'20 and Nov'20 till date have seen Research Analyst...
We re-initiate coverage on La Opala RG (LOG), which is engaged in manufacturing, marketing and distribution of opalware and crystalware products. LOG markets its opalware products under the brands La Opala and Diva and crystalware products under the brand Solitaire. LOG is the market leader in opalware category (~Rs6bn) and has ~48% market share as per our estimate. The other two players - Borosil and Cello together control ~35-40% of the market. As opalware category forms just ~6% of the overall tableware market, LOG faces competition from other sub-categories like Steelware (60% share), Melamine (~7% share) etc. In our view, durability is the key issue in Indian households and also lack of awareness regarding opalware qualities...
Mixed Show: Revenues In Line, But EBITDA Margin Declines La Opala RG (LORL) posted a mixed set of numbers for 3QFY19. Revenues increased 12.5% YoY and 8.2% QoQ to Rs785mn which were 1.3% below our estimate. The company reported EBITDA of Rs298mn, flat YoY but down 13.2% QoQ and 18% below our estimate. EBITDA margin for the quarter was 38.0%, 761bps below our estimate (-485bps YoY and -936bps QoQ). PAT decreased 4.4% YoY, but increased 1.5% QoQ to Rs219mn, 4.1% above our estimate. For 9MFY19, revenues increased 7.7% YoY to Rs2,061mn. EBITDA of Rs887mn increased 6.5% YoY as the margin declined 50bps to...
La Opala RG (LORL) ventured into the opalware segment in late 1980s, while its competitors entered this space only a few quarters ago. Just by sheer experience, we can be reasonably sure that LORL has a far better understanding of product manufacturing, channel-partners' demands and consumers' expectations. In fact, we view the entry of new players as a positive signal for the industry and its future growth prospects. LORL is on the path to increase its total capacity by 71% to 36,000tpa by FY21E. All new capacity addition will be in the premium Diva' brand which should help improve margins. Economies of scale should also play its part....
We had an interaction recently with Mr. Ajit Jhunjhunwala, promoter and Joint managing director of La Opala RG. The Rs4.5bn opal tableware market in India is expected to post a 15%-20% CAGR over the next few years. This growth is supported by rising disposable income and aspirations as well as demand for microwave-supportive tableware. The oligopolistic market is currently dominated by La Opala RG with a 60% share followed by other Indian manufacturers such as Borosil, Cello and Corelle brand products...
Rs1.35bn new greenfield plant a long term positive We maintain our Buy on La Opala with TP of Rs353 and value the company on our conservative Adj. OCF/EV yield based methodology. We believe the company would continue to post strong double digit volume growth in the opalware segment on the back of affordable pricing and significant under penetration of the category. Further announcement of setting of new plant at a cost of Rs1.35bn would help the company increase capacity from current 25K MT to 37K MT which we believe would be utilised over ~2.5 years and the commercial production would start from Sep'19. Further the...
We downgrade the stock to Hold with TP of Rs550 (earlier TP Rs555) as we value the company on our conservative Adj. OCF/EV yield based methodology. While the revenue growth has bounced back in the quarter on the back of re-stocking and healthy festive season demand along with margin expansion, competitive intensity continues to remain high. Our channel check suggests that both Borosil and Cello have launched new designs in the market and continue to offer higher trade margins. Uncertainty regarding use of cash on books while valuations at 41x/31x...
We are participating in AsiaMoney's Brokers Poll 2017. We would be pleased if you vote for us as the feedback helps us align our equity research offerings to meet your requirements. Click Here La Opala RG (LORL) reported revenues of Rs475mn for 1QFY18, up 0.6% YoY, but significantly below our estimate of Rs541mn. We were expecting a higher revenue number despite plant shutdown and destocking because of Goods and Services Tax or GST implementation, given the fact that the Madhupur plant which was shut down is a small plant with a capacity of 5,000tpa as against the bigger...
Strong Growth in Topline During Q4FY17, High Advertisement Cost Dents EBITDA Margins: La Opala RG Ltd (LORG) revenue witnessed a growth of 41.2% in Q4FY17 to Rs.761 Mn compared to Rs.539 Mn in Q4FY16.EBITDA Margins for the quarter stood at 27.2% compared to 37.9% in Q4FY16 witnessing a drop of (-) 1070 basis points (bps)mainly on account of jump in advertisement cost. LORG was able to better manage the raw material, employee and power cost during the quarter. PAT during the quarter stood at Rs.135 Mn compared to Rs.142 Mn in Q3FY16 and PAT Margins stood at 17.7% in Q4FY17, a drop (-) 868 bps compared to 26.4% in Q4FY16.
La Opala RG (LORL) reported revenues of Rs761mn for 4QFY17, up 41% YoY. The stellar growth can be attributed to two reasons. Firstly, the company was severely hit by demonetisation in 3QFY17, but witnessed demand revival by the end of December 2016 and sales picked up. Secondly, the company launched two new products under its Diva brand - Quadra and Sovrana in December 2016 which received a huge positive response, thereby contributing to 4QFY17 revenue growth. Total expenses for the quarter were up 65% YoY and stood at Rs554mn, mainly driven by the sharp increase in advertisement and promotion expenses from Rs14mn to Rs113mn (1,232bps increase as a percentage of sales). This resulted in EBITDA remaining flattish YoY at Rs207mn, 11% below our estimate of Rs233mn, and EBITDA margin taking a hit of...
La Opala RG (LORL) posted revenues of Rs661mn for 3QFY17, down 18% YoY, and significantly below our estimate of Rs821mn. The company was severely hit by demonetisation and witnessed volume decline of 10%-12%. Also, in 4QFY16, the company did restructuring of its pricing strategy to promote volume growth and address price anomalies. It went for a 15% reduction in prices of Diva range of products (constituting ~70% of revenues). This change in pricing led to weaker revenues in 3QFY17. The company had also reduced additional promotional trade discount offered to dealers to 0% from 15%. Operating profit was down 26% YoY to Rs446mn, 25% below our estimate, translating to operating profit margin of 32.4%, down...
Moderate Growth, Operating Performance Continue to Sustain during H1FY17: Moderate Growth in Revenues during H1FY17, but strong operating performance - La Opala witnessed a flat growth of 5.2% YoY in revenues the half yearly basis. Topline during H1FY17 stood at Rs.1209 Mn compared to Rs.1149 Mn in H1FY16. However, the absolute EBITDA grew by 22.4% YoY during the first half with EBITDA margins improving by 527 basis points (bps) with 37.6% in H1FY17 compared to 32.3% in H1FY16, mainly on account of decrease in the raw material, power & fuel and advertisement expenses as % of topline. EBITDA during H1FY17 stood at Rs.454 Mn compared to Rs.371 Mn in H1FY16.
La Opala RG's (LORL) revenues increased 10.8% on YoY basis in 2QFY17 from Rs629mn to Rs698mn, 8.2% above our estimate but 1.9% below Bloomberg estimate. This growth can be mainly attributed to good volume growth of ~23%-24% when adjusted for change in the billing structure. In 4QFY16, the company did restructuring of its pricing strategy to promote volume growth and address price anomalies. It went for a 15% reduction in prices of Diva range of products (constituting ~70% of revenues) and simultaneously reduced additional promotional trade discount offered to dealers to 0% from 15%. The company witnessed an increase in operating margin, which rose 403bps to 39.2%, 47bps/55bs above our/consensus estimate,...
La Opala RG (LORL) posted a decline of 1.6% YoY in 1QFY17 revenues to Rs511mn, which was below our estimate of Rs542mn, while volume growth stood at ~6%-7%. This can to attributed to the fact that 1Q is seasonally a weak quarter. Also, in 4QFY16 the company did a restructuring of its pricing strategy to promote volume growth and address price anomalies. It went for a 15% reduction in the prices of Diva range of products (constituting ~65% of revenues) and simultaneously reduced additional promotional trade discount offered to dealers to 0% from 15%. The company witnessed an increase in operating margin, which rose 652bps to 35.3%, 228bps/290bs above...
La Opala RG (LORL) posted revenue decline of 12.1% YoY (adjusted growth of 2%) to Rs539mn in 4QFY16, which was below our estimate of Rs736mn. Gross margin improved 826bps to 90.9% because of lower raw material costs. Increase in power and fuel expenses (727bps rise YoY) was mainly because of commissioning of new Sitarganj plant (operating at ~90% of capacity) while there was a 1,365bps drop in sales and advertisement expenses because of a 15% decline in trade discount schemes. This led to an increase in operating margin, which rose 1007bps to 38%, 196bps above our estimate. Following strong improvement in operating margin, operating profit increased 19.6% YoY to Rs205mn, which was below our estimate of...
La Opala RG (LORL) posted strong 3QFY16 revenue growth of 27.4% to Rs805mn, 5.4% below our estimate but 2.3% above Bloomberg estimate. Gross margin improved 306bps to 82.4% from 79.3% because of lower raw material costs. Lower power and fuel costs (72bps decline YoY) aided improvement in operating margin, which rose 310bps to 36%,191bps above our estimate. Following healthy revenue and strong improvement in operating margin, operating profit grew 39.4% to Rs290mn, in line with our estimate. Supported by higher operating profit, net profit increased 45.5% to Rs202mn, up 3.6%/7.9% against our/Bloomberg estimate of Rs195mn/Rs187mn, respectively. Revenue increased mainly because of the product mix...
The commencing of the additional 8,000 MTPA at the Sitargunj unit in November 2015 will ramp up the capacity by 16,000 MTPA creating enough room to scale the mid premium brand Diva', rapidly in the years to come. Introduction of the borosilicate cookware products to widen the product portfolio and increasing advertisement spends to create a brand for the company. We expect the company to grow its revenue at 25% CAGR in FY15-17E
La Opala RG (LORL) posted 2QFY16 revenue growth of 10.6% to Rs629mn, 5.4%/4.4% below our/Bloomberg consensus estimates, respectively, mainly led by a high base of 2QFY15 and festive demand shifting to the next quarter. Among its three brands - La Opala, Diva and Crystal - Diva enjoys the highest margin and is growing at a faster pace compared to others. In addition, at present ~20% of Diva revenue is contributed by Ivory collection (launched two years ago), which enjoys a 15% premium compared to Diva's Classic collection. Lower power and fuel costs (31% below our estimate and 378bps down YoY as a percentage of sales) and lower selling & administration expenses ( 23% below our estimate and 401bps down YoY as a...
Despite a high base of 4QFY14 and challenging market conditions, La Opala RG (LORL) posted healthy revenue growth of 25.5% to Rs632mn for 4QFY15, in line with our estimate and 2.9% above Bloomberg estimate. Despite gross margin improvement by 226bps to 82.6% and lower power and fuel costs by 666bps, operating margin fell 36bps to 27.9% on account of higher advertisement expenses/other expenses by 665bps/374bps, respectively. Reported EBITDA margin was 197bps/262bps below our/Bloomberg estimates, respectively. With only a 3.1%/8.4% increase in inventory/receivables, respectively, against a 25.6% increase in sales, inventory/receivable days improved 13/6...
La Opala RG (LORL) posted its highest-ever operating margin of 32.9% in 3QFY15, up 302bps/243bps from our/Bloomberg consensus estimates, respectively, on account of the decline in power costs by 280bps, better product mix, a 7% price hike in Diva brand and stable input costs. With an early Diwali festival in 2014, most of the sales on this count took place in 2QFY15. Streamlining the impact of Diwali sales, if we combine the revenue of 2QFY15 and 3QFY15, LORL reported net revenue of Rs1,210mn, up 24% YoY. Following a lower double-digit revenue growth, we have revised downwards our FY15/FY16/FY17 revenue estimates by 5.2%/8.2%/10.4%, respectively. However, as the company reported...
