The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

live

bselive
nselive

Volume

Todays L/H

Sharekhan's research report on Insecticides (India)

In-line operating profit of Rs. 58 crore (up 10% q-o-q) as stronger-than-expected revenue growth of 20% y-o-y was offset by a miss in margins. PAT of Rs. 38 crore (up 9.6% y-o-y) was 2% above our estimate due to lower-than-expected tax rate. Strong revenue growth was led by 21%/31% y-o-y revenue growth from B2C/B2B business. OPM miss of 87 bps was due to lower-than-expected gross margin and FX loss of Rs. 6.5 crore. Adjusted OPM of 11.6% was slightly better than our estimate of 11.3%. Management maintained its double-digit (18-20% y-o-y) revenue growth and margin guidance of a 100 bps rise for FY23. It expects a similar growth momentum in FY24. However, the company lowered export revenue guidance by 25% to Rs. 150 crore.

Outlook

We maintain a Buy on Insecticides (India) Limited with a revised PT of Rs. 1,170 as we expect a strong 34% PAT CAGR over FY22-FY24E. Valuation of 13.7x/10.4x its FY2023E/FY2024E EPS is attractive.

Buy Insecticides (India) target of Rs 1170: Sharekhan

Sharekhan is bullish on Insecticides (India) has recommended buy rating on the stock with a target price of Rs 1170 in its research report dated August 17, 2022.

Related stories