Fundamentals

KAVERI SEED COMPANY

Ticker: 532899 BUY: Rs.580.35
Target: Rs.646

The company is engaged in the production, processing and marketing of hybrid seeds. In FY18, the revenue was up by 15.3 per cent YoY to Rs 772.40 crore. Its EBITDA margin improved from 11.7 per cent to 28.2 per cent in FY18. Also, the PAT for the year jumped by 168.1 per cent YoY from Rs 78.5 crore to Rs 210.3 crore. The company plans to generate 60 per cent of its revenue from non-cotton segment, which is a high margin business, over the next 5 years. For this, it has launched 2 cotton hybrids, 3 maize hybrids, 1 in pearl millet, 2 hybrid rice, etc. Historically, the June quarter delivers robust numbers every year. The management expects 15-20 per cent growth in the June quarter of FY19 itself. It is planning to foray into Indonesia, Thailand, Vietnam and Philippines. Considering these factors, we recommend it as a BUY.



JUST DIAL

Ticker: 535648 BUY: Rs.564.75
Target: Rs.648

Just Dial is a local search engine company engaged in providing search and related services. It offers services across various platforms, such as voice, web, mobile internet and mobile applications. In Q4FY18, the consolidated revenues grew by 10.3 per cent YoY led by strong sales headcount addition. Its EBITDA margin improved from 17.7 per cent to 22.8 per cent on a YoY basis. The PAT for the quarter increased by 53.7 per cent YoY. The management has estimated 15 per cent YoY growth in revenues for FY19. The company is focusing on the Tier-II and Tier-III cities and a turnaround in demand in Tier-I cities is seen. It is planning to spend Rs 100 crore towards advertising and promotion in FY19 as against Rs 65 crore in FY18. Also, it is trading at decent valuation of 26.8x on TTM basis. Thus, we recommend it as a BUY.