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Wallfort Financial
Indo Count (Buy)
CMP: ₹400.20
Target: ₹572
Indo Count Industries Ltd (ICIL) has reported top-line growth of 14.54 per cent y-o-y to ₹428 crore in Q3FY15 against ₹374 crore in Q3FY14. Revenue growth of the company was lower because of discontinuation and tapering down of the consumer durable division and also on account of the reduction in volume of the spinning business but the home textile (HT) is the key growth driver. The growth on account of HT were witnessing improvement with demand of HT products across the geographies especially the US due to additional disposable income for the US family. Home textiles division reported revenue of ₹376 crore in Q3FY15 compared with ₹270 crore in Q3FY14, a growth of 39 per cent. For 9mFY15, ICIL has posted revenue of ₹1,223 crore which increased by 11.33 per cent on y-o-y basis. For 9mFY15, the revenue contribution from textile division and consumer durable divisions stood at 96 per cent and 4 per cent, respectively. The HT during 9mFY15 registered revenue growth of 28 per cent to ₹995 crore against ₹776 crore for the corresponding period of the previous year. We assign a PE multiple of 10x on FY17E and arrive at a value of ₹572 a share.
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