Sharekhan has given Buy recommendation for KPR Mill with a target price of Rs. 810 in its research report issued on Apr 28, 2022

Sharekhan’s research report on KPR Mill

KPR Mill (KPR) continued its strong revenue growth momentum in Q4FY2022. Revenue grew 30% y-o-y to Rs. 1,449.9 crore; the textile business continued to grow strongly with 34% y-o-y revenue growth, while the sugar business reported 12.6% y-o-y revenue growth. EBITDA margin declined by 75 bps y-o-y to 23.2%, affected by the surge in cotton/yarn prices. PAT grew by 18% y-o-y to Rs. 220 crore. Strong export demand and capacity expansions will help the garmenting division’s revenue to post a 20% CAGR over FY2022-FY2024. Sugar business would receive full benefits of expanded capacity from FY2023.

Outlook

The stock currently trades at 22.1x/18.1x its FY2023E/FY2024E EPS and 14.4x/11.8x its FY2023E/FY2024E EV/EBITDA. We maintain Buy with an unchanged PT of Rs. 810.

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