MOSL: TRIDENT (Buy)-Firing on all cylinders; Well on track to meet full-year guidance
Trident: Firing on all cylinders; Well on track to meet full-year guidance
(TRID IN, Mkt Cap USD0.4b, CMP INR64, TP INR83, 30% Upside, Buy)
- Strong all-round beat: TRID’s revenue increased 24.2% YoY to INR13,915m (estimated INR12,121m) in 2QFY19. EBITDA margin expanded 730bp YoY to 22.8% (estimated 20.5%), driven by (1) operating leverage in both bed and bath linen, and (2) premiumization in bed linen. EBITDA adjusted for forex loss increased 83% YoY to INR3,169m (estimated INR2,485m). Adjusted PAT increased 194.5% YoY to INR1,489m (estimated INR936m). TRID has posted 10.3% growth in 1HFY19 with a margin expansion of 430bp. We expect the momentum to continue with a growth of 19.1% in 2HFY19 and a margin expansion of 50bp.
- Promising growth; here to sustain: 2QFY19 was a promising quarter for the company as each segment surpassed the utilization levels of FY18. Bath linen attained a utilization of 53% in 2QFY19 v/s 45% in FY18 and bed linen attained a utilization of 61% in 2QFY19 v/s 44% in FY18. Going forward, management expects to achieve 60-70% utilization for both segments by FY20.
Trident Limited is a terry towel, yarn and wheat straw-based paper manufacturer. The Company's segments include Textiles, Paper and Chemical/Chemicals, and Others. The Company's geographical segments include USA and Rest of the world. The Textiles segment includes yarn, towel, bed sheets and dyed yarn manufacturing (including utility service). The Paper and Chemical/Chemicals segment includes paper and sulfuric acid (including utility service). The Others segment includes sale of software and related services. The Company's product portfolio includes solid bath ensembles, beach towels, embroidered towels, bath mats, bathrobes, printed bed linen, duvets, duvet covers, cushion covers, viscose blended yarn, core spun yarn, bamboo/cotton yarn, dyed bed linen set, micro modal/cotton blended yarn, drawing paper, and Bible and offset print paper. Its brands include Trident Spectra, Trident My Choice and Trident Natural. It has manufacturing facilities in Punjab and Madhya Pradesh.
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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