Nilkamal: In-Line Q1-FY19, Maintain Buy Investment Thesis.

Nilkamal - High Prob. Of Re-Rating Driven by EBITDAM Expansion. Strong BS Metrics & Inexpensive Val.

Independent Research Analyst

Mamta Verma

DC India Research

DC India Research LLP (DCIR) is based out of Mumbai, India.

We specialize in providing customized, independent research across listed and unlisted companies in India across equities and credit including sectoral research. Our customers include India focussed PE funds, special situation funds, domestic AMCs, Wealth Advisory& PMS firms, Rating Agencies & Investment Advisors. 

The DCIR board consists of prominent names from the industry as well as CIO’s of Hedge funds.

Equity Bottom-Up

High possibility of re-rating driven by EBITDAM expansion. Strong BS metrics &amp; inexpensive valuations make the stock attractive<table class="table table-striped"><tbody>
<tr>
<td>Nilkamal Ltd.</td>
<td>Q4FY17</td>
<td>Q1FY18</td>
<td>Q2FY18</td>
<td>Q3FY18</td>
<td>Q4FY18</td>
</tr>
<tr>
<td>Standalone (Rs. Mn.)</td>
<td>Mar-17</td>
<td>Jun-17</td>
<td>Sep-17</td>
<td>Dec-17</td>
<td>Mar-18</td>
</tr>
<tr>
<td>Net Sales</td>
<td>5,319</td>
<td>4,876</td>
<td>4,647</td>
<td>5,228</td>
<td>5,961</td>
</tr>
<tr>
<td>YoY (%)</td>
<td>6.9%</td>
<td>5.8%</td>
<td>-0.8%</td>
<td>5.5%</td>
<td>12.1%</td>
</tr>
<tr>
<td>QoQ (%)</td>
<td>7.3%</td>
<td>-8.3%</td>
<td>-4.7%</td>
<td>12.5%</td>
<td>14.0%</td>
</tr>
<tr>
<td>Raw Material</td>
<td>3,101</td>
<td>2,794</td>
<td>2,544</td>
<td>2,847</td>
<td>3,420</td>
</tr>
<tr>
<td>YoY (%)</td>
<td>8.4%</td>
<td>7.3%</td>
<td>-5.3%</td>
<td>-0.9%</td>
<td>10.3%</td>
</tr>
<tr>
<td>QoQ (%)</td>
<td>7.9%</td>
<td>-9.9%</td>
<td>-8.9%</td>
<td>11.9%</td>
<td>20.1%</td>
</tr>
<tr>
<td>as % net sales (%)</td>
<td>58.3%</td>
<td>57.3%</td>
<td>54.8%</td>
<td>54.5%</td>
<td>57.4%</td>
</tr>
<tr>
<td>Opex &amp; Mfg. expenses</td>
<td>1,262</td>
<td>1,247</td>
<td>1,125</td>
<td>1,306</td>
<td>1,464</td>
</tr>
</tbody></table>…

High possibility of re-rating driven by EBITDAM expansion. Strong BS metrics &amp; inexpensive valuations make the stock attractive

Nilkamal Ltd.
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18


Standalone (Rs. Mn.)
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18


Net Sales
5,319
4,876
4,647
5,228
5,961


YoY (%)
6.9%
5.8%
-0.8%
5.5%
12.1%


QoQ (%)
7.3%
-8.3%
-4.7%
12.5%
14.0%


Raw Material
3,101
2,794
2,544
2,847
3,420


YoY (%)
8.4%
7.3%
-5.3%
-0.9%
10.3%


QoQ (%)
7.9%
-9.9%
-8.9%
11.9%
20.1%


as % net sales (%)
58.3%
57.3%
54.8%
54.5%
57.4%


Opex &amp; Mfg. expenses
1,262
1,247
1,125
1,306
1,464

…

Nilkamal– In-Line Q4-FY18, Better Vol. Gr. In Plastics/ Ramp-Up of New Biz - To Drive Re-Rating.