Our Investment Recommendation : Camlin Fine Sciences Ltd

Investment Call:

 Buy Camlin Fine Sciences Ltd around 87.00---85.00. Target 150+

Technical Levels

Support at 84 --75 is present. Below this some weakness can be expected. 

Resistance is at 98--103--107 levels is present. A move above this level we can expect further positive momentum in this. 

Fundamentals 

Market Cap.: ₹ 931.25 Cr.

Current Price: ₹ 90.25

Book Value: ₹ 12.35

Stock P/E: 30.96

Dividend Yield: 0.47%

Face Value: ₹ 1.00

52 Week High/Low: ₹ 121.20 / ₹ 76.00

• CFSL standalone revenue de‐grew by 3.2% Y/Y to Rs.1,009 mn (v/s Rs 978 mnin Q1FY16). On the consolidated basis revenue grew by 14.3% Y/Y to Rs.1,389mn (v/s Rs.1,216 mn in Q1FY16) due to consolidation of Dresen (65% stake).

•  Despite muted revenue growth, standalone EBITDA margin expanded 210 bps

• Y/Y to 16.5% (v/s 14.4% in Q1FY16). However, consolidated EBITDA margin contracted to 10.4% (v/s 22.7% in Q1FY16). The key reason is consolidation of Dresen, which lead to increase in COGS and SG&A expenditure.

•  The company reported depreciation expenditure of Rs.48 mn (v/s Rs.40 mn inQ1FY16). During the quarter, consolidated net financials & other income stoodat –Rs 9 mn (v/s –Rs 33 mn in Q1FY16). The tax rate during the quarter stoodat 65% (v/s 31.5% in Q1FY16). The significant increase in tax rate was due tohigher tax rate in Europe.

•  As a result, the consolidated net margin contracted to 0.9% (v/s 11.4% inQ1FY16). On a standalone basis the net margin expanded to 6.4% (v/s 5.6% inQ1FY16).

Quarterly Results

	Sep-13	Dec-13	Mar-14	Jun-14	Sep-14	Dec-14	Mar-15	Jun-15	Sep-15	Dec-15	Mar-16	Jun-16
Sales	94.61	91.22	110.62	88.35	98.66	108.57	135.12	99.49	102.82	101.51	108.37	102.14
Expenses	80.61	74.91	95.63	74.04	84.55	92.63	118.54	83.7	91.82	84.78	88.9	84.27
Operating Profit	14	16.31	14.99	14.31	14.11	15.94	16.58	15.79	11	16.73	19.47	17.87
OPM	14.8	17.88	13.55	16.2	14.3	14.68	12.27	15.87	10.7	16.48	17.97	17.5
Other Income	0.46	0.45	0.6	0.34	0.86	0.28	0.46	0.51	1.57	0.56	1.06	1.42
Depreciation	2.11	2.79	2.33	2.54	2.54	2.51	2.38	2.47	2.56	2.55	2.56	2.95
Interest	4.75	6.45	6.21	4.58	5.31	5.3	5.96	5.6	4.79	5.5	5.94	6.26
Profit before tax	7.61	7.53	7.06	7.53	7.12	8.4	8.71	8.24	5.21	9.24	12.03	10.09
Tax	1.8	2.74	3.65	2.06	2.03	1.56	0.3	2.75	1.38	2.7	2.13	3.62
Net Profit	5.81	4.8	3.4	5.47	5.09	6.84	8.42	5.49	3.83	6.54	9.89	6.47

Compounded Sales Growth 

10 years : 27.27%
5 Years : 20.13%
3 years : 9.55
TTM : -6.11