Nilkamal Ltd. share price target

For 4QFY2018, Nilkamal Ltd (NIL) posted results in-line with our expectations on top-line front although, it is slightly down on the bottom line front as standalone revenues grew by ~12% y-o-y. However, operating margin remained flat y-o-y on account of increase in other expenses. On the bottom-line front, NIL reported lower growth of ~5%..

Nilkamal's (NILK) Q4FY18 revenue was in-line with our expectations while EBITDA and PAT was a miss by 13%/16% due to higher than expected raw material costs. Revenue increased 12% to Rs5.9bn YoY, EBITDA margin remained flattish YoY to 11% (-171bps QoQ) while PAT increased by 5% to Rs.338mn. Plastic segment registered volume and value growth of 9% and 15% on a QoQ basis. The company's mattresses business grew 45% YoY to Rs590 mn in FY18 which is 18% of total revenue growth in FY18. NILK is also entering into Foam manufacturing business (capex of Rs350 mn) which would start by end FY19. We are lowering our...

Valuation: We are positive on the company backed by the implementation of GST that will boost the revenue of the organized sector and on the account of investment made by the company to diversify its product portfolio which will boost its revenue. At CMP of Rs.1593.1, it is trading at a P/E multiple of 19.8x and 17.1x to its FY18E and FY19E earnings, respectively. On the basis of estimates, we arrive at a target price in...

Nilkamal Ltd's Q3FY18 net revenue grew by 5.5% YoY, which was slightly subdued. However, operating profit & PAT growth of 34.9% & 17.1% YoY were above our projections. Aided by lower material cost and other expenses (as % to net revenue), the EBITDA margins improved by 276bps YoY, which is encouraging.

Plastic and mattress segment drives growth, @home flat: in 3QFY18, Plastic segment saw volume/value growth of 2%/5% YoY (11%/16% QoQ). Mattress segment saw robust performance with revenue growth of 42% YoY to INR151mn.This was largely on account of commencement of manufacturing units in east (Barjora) and west (Bhiwandi) leading to better geographic penetration. Performance of @home business was flat, in-line with expectation. Revenue was down 3% to INR561mn, however, significant improvement in operational efficiency led to PBT...

Nilkamal's (NILK) Q3FY18 revenue & PAT came below expectations by 9%/7% while EBITDA margin gave a positive surprise. It reported 2% volume and 5% value growth in Plastics, fell short of our expectations. Revenue increased 5.5% YoY to Rs5.2bn, EBITDA margin expanded 276bps YoY to 12.7%, while PAT increased 17.2% YoY to Rs331 mn. Though Retail segment revenue decreased 3%, its EBIT improved to Rs30 mn against Rs9 mn. We are cutting our EBITDA/PAT estimates by 2.6%/4.4% for FY18 and 1.6%/1.8% for FY19 and introducing FY20 numbers. We roll over our valuation on FY20 which...

Nilkamal Ltd is engaged in the manufacturing and retail sales of moulded plastic furniture and material handling products. The company has three divisions viz. plastics, lifestyle furniture and furnishings & accessories. Nilkamal's manufacturing plants are located at Barjora (West Bengal), Hosur (Tamil Nadu), Jammu, Dadra & Nagar ..

Nilkamal Ltd's Q2FY18 numbers were broadly in line with our estimates. Net revenue de-grew marginally by 0.8% YoY, impacted by poor volume offtake in Plastics division due to GST transition. However, operating profit & PAT increased by 11.7% & 5.9% YoY respectively, while operating margins improved by 139bps YoY, which was encouraging.

Market leader in moulded furniture (chairs) in India, with strong brand: Nilkamal is a market leader with ~32% share in the moulded furniture segment and sells ~1.4 million plastic moulded chairs per annum (one of the largest in India). The plastics division is the largest revenue generator for the company at 89% in FY17. The company has been able to grow this business consistently (8.3% CAGR over FY12-17) on the...

Nilkamal's (NILK) Q2FY18 revenue came below expectation while EBITDA/PAT was 17%/9% ahead of our expectation on the back of lower raw material costs. It reported 4% volume and 2% value de-growth in plastic division due to GST. Revenue declined 0.8% YoY to Rs.4.6bn, EBITDA margin expanded 138bps YoY to...