Edelweiss is bullish on Asian Granito recommended buy rating on the stock with a target price of Rs 625 in its research report dated May 21, 2018.
Edelweiss' research report on Asian Granito
Asian Granito (AGL) reported mixed set of numbers while revenue growth for Q4FY18 at 18% YoY to INR3.9bn was above est of INR3.7bn, EBITDA grew by only 5% YoY to INR363mn (est INR431mn) on account of fall in margins. However, led by lower interest and depreciation, PAT increased by 8% YoY to INR168mn (est INR178mn). While volumes increased by 29% YoY; drop in revenues from trading of marble affected overall revenue growth. Further, increasing employees and gas cost has led to fall in margins by 110 bps YoY and 440 bps QoQ to 9.3%. To factor in ongoing margin pressure, we cut our FY19/20E EPS estimate by 17%/13%.
Outlook
AGL continues with its strategy of driving retail network to boost revenues and increasing share of value added products to support margin expansion. Reiterate ‘BUY’ with revised TP of INR625 (20x FY20E EPS; INR720 earlie
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