Mayur Uniquoters Q4 Results Review - Re-Rating Potential If Meets Robust Guidance: ICICI Securities

"NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.Mayur Uniquoters Ltd. inline profit after tax (up 38% YoY) in 4Q was driven by strong revenue (up 14% YoY at Rs 2.2 billion, led by auto and exports) and soft Ebitda margin (18.7%, down 114 basis points QoQ versus 20% estimate). Strong cash flow generation continued (FY23/24 CFO: Rs 1.21 billion/1.13 billion). For FY25, management has reiterated its strong growth guidance of 15-20% (export 20-25%, domestic 15-20%).OEM exports has potential to grow its revenue to 2.5 times in three years by adding new models every quarter. Footwear segment will take two years to revive due to large inventory liquidation, post BIS implementation, is under process. Overall margins will improve with greater mix of exports.The current ~75% capacity utilization provides ample room for healthy growth over two-three years. Mayur Uniquoters has announced to invest Rs 300 million in its U.S subsidiary to buy land in Mexico to set up a warehouse. It can also consider setting up a manufacturing facility in Mexico in future to boost business.A similar set up is also under planning for Europe to expand business there. Slow ramp up in the PU (FY24 revenue Rs 250 million, Rs 1.25 billion potential) plant is a concern though, impacted by continued illegal imports in India despite 'Add' imposition.After a decent 4Q, we maintain our earnings estimates. After a muted 6%/6% compounded annual growth rate in revenue/profit after tax over FY19-24, we now expect a healthy 16%/20% compounded annual growth rate over FY24-26E with 21%+ Ebitda margin and ~22% return on capital employed in FY26E.Our estimates are based on management guidance of healthy recovery in FY25 and a strong bounce in FY26 (driven by exports).Maintain 'Buy' with a higher target price of Rs 720 (18 times FY26E price/earning, earlier Rs 619 at 16 times). We see large potential for more re-rating if Mayur Uniquoters meets its guidance..Click on the attachment to read the full report:.Sanjeev Sanyal Says Rating Agencies Behind Curve, India Should Be Two Notches Above.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

Mayur Uniquoters Q4 Results Review - Re-Rating Potential If Meets Robust Guidance: ICICI Securities

Margins will increase with strong recovery in exports.

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Mayur Uniquoters Q4 Results Review - Re-Rating Potential If Meets Robust Guidance: ICICI Securities

Margins will increase with strong recovery in exports.

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