Fundamentals

RELAXO FOOTWEARS

Ticker: 530517 BUY: Rs.727.90
Target: Rs.853

The company is engaged in manufacturing and trading of footwear and related products and is a market leader in the economic category. Its brands include Hawaii, Flite, Sparx, Schoolmate, Elena, Casualz and Bahamas. In Q1FY19, its revenue was up by 17.3 percent YoY led by good volume growth. EBITDA increased by 16.9 percent YoY due better product mix and operating efficiencies. Adjusted PAT rose by 23 percent YoY. The company is focusing to expand its distribution to western and southern markets in India. Also, the GST rate cut from 18 percent to 5 percent on footwear ranging from Rs 500 to Rs 1000 would benefit the company. It plans to add 50 outlets to its current network of 300 outlets, which would generate Rs 200 crore towards revenue. Thus, we recommend it as a BUY.




ACC LTD.

Ticker: 500410 BUY: Rs.1517.60
Target: Rs.1676

The company is engaged in manufacturing of cement and ready-mix concrete. It is a pan-India player and the geographical mix includes North (18 per cent), South (30 per cent), West (12 per cent), East (27 per cent) and Central (13 percent). The company had commissioned Jamul and Sindri plants in H2CY16 by taking the capacity from 2.8 MT to 33.4 MT. This capacity ramp-up led to growth in volumes in CY17 and CYH118 and also helped company to gain its lost market share. It has renewed the technology and know-how agreement from Jan. 1, 2018 for a period of three years. Also, the board has approved master supply agreement (MSA) with Ambuja Cements for three years which will bring in synergy benefits. This year’s normal monsoon is expected to bring uptick in demand in construction and infrastructure sectors. Thus, we recommend it as a BUY.