MOSL: Morning India (24/August/17)-1. Trident (An attractive utilization play)2. India Strategy (Contrarian Investing)3. P & G Hygiene4. Castrol India
​MOrning India (24/August/17): 1. Trident (An attractive utilization play); 2. India Strategy (Contrarian Investing); 3. P & G Hygiene; 4. Castrol India
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Today’s top research theme
Trident - Initiating Coverage: An attractive utilization play
- ​TRID is set to deliver CAGR of 9% in revenue and 24% in earnings over FY17-20, driven by revenue CAGR of 44% in bed linen and 12% in bath linen.
- The recently ventured bed linen segment is expected to turn EBITDA profitable by 3QFY18 as utilization touches 40%. The segment's share in overall revenue should increase from 4% in FY17 to 9% in FY20.
- After significant capacity expansion in bath linen in FY15, TRID is expected to reap its benefits and witness higher utilization (65% in FY20 v/s 50% in FY17), which would not require further addition of spindles as yarn capacity would be utilized in-house.
- The rising share of copier paper should lead to paper business margin expansion of 340bp to 38% in FY20.
- We value TRID at 11x FY19E EPS, arriving at a TP of INR114. Initiating with Buy.
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Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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