Arihant Capital has given Buy recommendation for RPSG Ventures with a target price of Rs. 2903 in its research report issued on Dec 01, 2021
Arihant Capital’s research report on RPSG Ventures
RPSG Ventures in Q2FY22, Revenues exceeded expectations and came in at INR 1,599 cr against estimates of INR 1,365 cr. It increased by 23% YoY/-1% QoQ driven by the growth across the segment. However, the Gross Profit margin declined 40 bps YoY/ -107 bps QoQ due to raw material cost pressure. EBITDA increased 34% YoY/-7% QoQ and stood at INR 201 Cr and above the expectation of INR 165 Cr. EBITDA margin expanded by 105 bps YoY/ contracted by 86 bps to 12.55%. EBITDA margin contracted on the QoQ basis in line with compression in gross profit margin.
We maintain our Buy rating on the stock and value it on SOTP valuation for a target price of INR 2,483 per share (Bear/Lower case scenario), INR 2,903 per share (Base case scenario) and INR 3,199 per share (Best case scenario).