Axis Securities's research report on Mayur UniquoterMayur Uniquoters (MUL) in its 3QFY16 posted con. revenue of Rs.119 cr (down 7.9% yoy), on account of lower realization (declined by ~4% on YoY). MUL’s realisation is linked to crude oil price (key raw material of MUL). Hence decline in crude oil price has resulted in lower realisation. Volume has increased by ~7% yoy. The company has managed to retain partial benefit of lower raw material price. In addition to this increase in revenue share from high margin Auto OEM and General Exports has resulted in expansion in EBITDA margin by 776 bps yoy to 27.6%. Net profit of MUL in 3QFY16 grew by 16.9% YoY to Rs.20 cr. In terms of segment, management is focusing on Auto OEM and general exports as future growth drivers. Footwear industry has witnessed weakness in revenue growth, whereas revenue from export OEM and auto replacement market is picking up. We expect MUL to post strong revenue/ PAT CAGR of 19%/21.4% over FY15-FY17E on the back of additional capacity from 6th & 7th line, backward integration in knitted fabric, recovery in the auto cycle and management’s focus on high margin export business. Further looking at the healthy return ratios (RoE) of over 25% we maintain BUY on Mayur Uniquoters with Target Price of Rs 520.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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