Mayur Uniquoters Ltd. share price target

We maintain our Buy rating on Mayur Uniquoters and revise our TP to Rs529 as the company's footwear business is well on its way to recovery and its high margin profile remains intact. We expect good performance to be maintained in the coming quarters, aided by i) continued recovery in the footwear segment, and ii) higher traction in exports. The company's foray into the PU business and its new plant in Mysore will also add to its growth momentum, albeit in the medium term as these projects are expected to start in the next couple of months. Q2FY18 was in-line with estimates as strong sales growth supported overall earnings. We...

We maintain our Buy rating on Mayur Uniquoters and revise our TP to Rs529 as the company's footwear business is well on its way to recovery and its high margin profile remains intact. We expect good performance to be maintained in the coming quarters, aided by i) continued recovery in the footwear segment, and ii) higher traction in exports. The company's foray into the PU business and its new plant in Mysore will also add to its growth momentum, albeit in the medium term as these projects are expected to start in the next couple of months. Q2FY18 was in-line with estimates as strong sales growth supported overall earnings. We...

Mayur Uniquoters Ltd. (MUL) reported better than expected Q1FY18 result. Net sales increased by 8.9% YoY while EBITDA/PAT was higher by 4.9%/4.2% YoY. The management has guided double digit sales growth with stable margins in FY18. Further, the company's PVC and PU capacity expansion plans are on track and the plants will be operational in H2FY19E.

.3x FY18e EPS of Rs 19.71 and 16.2x FY19e EPS of Rs 22.20. Artificial leather is majorly replacing pure leather in the fields of automobile, footwear, and furnishing, furnishing due to lower cost. Per capita footwear consumption in India is expected to increase up to four pairs (~1.5 now) , while domestic footwear consumption is expected to...

Slow Recovery in Footwear Segment Saw Improved Topline but Disappointing Margins: Mayur Uniquoters topline has marginally improved by 7.6% at Rs. 1321 Mn vs.Rs.1228 Mn on QoQ basis, while we see a 3.4% increase on YoY basis. The expenses have increased due to increase in raw material prices. PAT in Q4FY17 is at Rs.187 Mn and has decreased from Rs. 235 Mn YoY, while marginally increasingby 0.3% QoQ due to the slowdown of footwear segment from demonetization and a very slow recovery from the last 2 months.

Mayur Uniquoters Ltd. (MUL) is the largest manufacturer of artificial leather/ PVC vinyl in India. The company is a leading synthetic leather supplier to branded footwear, automotive and leather goods and garments companies in India and abroad. MUL enjoys 50% market share of organised industry, which mirrors its strong positioning and growth opportunities, in line with industry growth.

Footwear Slowdown Affected Q3FY17; Upcoming Plants Hold Key for Outlook: The phase of demonetization brought in a decline of 6% in general and ~ 20%fall in the domestic footwear business. EBITDA margins slacked 232 bps YoY to 25.3% due to higher other expenditure which increased 18.6% YoY. PAT was at Rs. 186 Mn down by 6.1% QoQ and 6.4% YoY; and the fall was buffered/ mitigatedto some extent by new innovations and automobiles exports.

Mayur Uniquoters Ltd (MUL) delivered a muted performance in Q2FY17 with decline in revenue by 10.6% YoY on account of lower realisation and weak volume growth. EBIDTA margin has contracted by 335 bps to 23.8% on sequential basis. Considering weak volume growth and uncertainty over commissioning of ..

Revenues De-grown; Margins Expanded on the Back of Effective Product Mix: The Q2FY17 revenue numbers of MUL have de-grown by 10.6% YoY to reach Rs.1343 mn YoY. The operating expenditure has fallen by 13.0%, which has resultedin the EBITDA margins to increase by 218 bps YoY. The margins have expanded due to effective product mix and economies of scale. On Half year basis, revenueshave seen de-growth by 4.9% YoY to reach Rs. 2767 mn. EBITDA numbers came in at Rs.707mn showing a significant growth of 9.9% with EBITDA margins reaching at 25.6%. EBITDA margins for half year has shown an increase of 342 bps YoY due to better product mix.

Mayur is one of the largest synthetic leather manufacturers in India having an installed capacity of 3.05 million linear meters per month. Mayur is supplying to US automotive giants like Ford, Chrysler, etc. which has resulted into an...