Geojit recommended is bullish on Apex Frozen Foods has recommended buy rating on the stock with a target price of Rs 340 in its research report dated September 02, 2020.
Geojit's research report on Apex Frozen Foods
EBITDA grew by 51.6%YoY mainly aided by 620bps increase in gross margin due to better realisation and reduction in raw material cost. Apex has recently got all the required approvals for its newly added capacity of 20,000MT and ramp up in utilization will aid future growth. We increase our volume assumptions to factor gradual improvement in industry supply-chain while appreciation in INR will impact realisation. Expect revenue/PAT to grow at 15%/28% CAGR over FY20E-FY22E. Currently the stock trades at 13x 1Yr Fwd P/E (2Yr Avg=16x). We value the stock at 12X FY22E EPS, considering the current uncertain situation.
Outlook
We maintain Buy rating with a revised Target of Rs.340, due to better than expected volumes and attractive valuation. Q1FY21 revenue de-grew by 1.6%YoY. Better realization and rupee depreciation offset the impact of 11.4%YoY decline in volumes.
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