Accumulate Shakti Pumps; target of Rs 465: Arihant Capital
Arihant Capital’s research report on Shakti Pumps
Shakti Pumps came out with good set of results in Q4FY19, ahead of our estimates. Consolidated revenue for the quarter grew 22.1% YoY and 4.9% QoQ to Rs 1596 mn against our estimate of Rs 1580 mn. EBITDA for Q4FY19 came at Rs 279 mn (estimate Rs 340 mn) a growth of 17.1% YoY and 2.7% QoQ. However EBITDA margin fell 74bps YoY to 17.5% for the quarter against 18.2% in corresponding quarter last year. The fall in margin was due to higher raw material (+29% YoY) and staff costs (+28.4% YoY). PAT for the quarter stood at Rs 165 mn which was ahead of our estimate of Rs 120 mn, a growth of 64.9% YoY and 31.1% QoQ. The stupendous growth of PAT on YoY basis (+64.9% YoY) was partially due to lower effective tax rate for the quarter (19.4% in Q4FY19 v/s 43.3% in Q4FY18).
We remain positive on Shakti Pumps from longer term perspective, and have an Accumulate rating with a revised target price of Rs 465.
For all recommendations report, click here
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