KPR Mill Q4 Results Review - Higher Garment, Sugar Volumes To Drive Growth In FY25: Systematix

"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.KPR Mill Ltd.’s Q4 was a mixed bag, with revenue missing estimate, operating performance in line and Ebitda margin surpassing estimate. Net sales fell 13% YoY to Rs 17 billion (6% lower than our estimate); the ~50% YoY drop in sugar and ethanol revenues, marginally offset by 3% YoY growth in textile revenue, led to the variance. Gross margin expanded 541 basis points YoY to 38.8% (versus our estimate of 40%), boosted by soft raw material prices. Ebitda rose 5% YoY and 23% QoQ to Rs 3.3 billion, in line with our estimate. Ebitda margin expanded 332 bps YoY, but contracted 213 bps QoQ to 19.7% (we estimated 19.1%). Profit before tax grew 6% YoY and 18% QoQ to Rs 2.8 billion but was 6% lower than our estimate. Higher effective tax rate of 23.1% versus 19.8% in Q4 FY23, led to the tempered 2% YoY growth in profit after tax at Rs 2.1 billion (9% below estimate). KPR currently has an order book of ~Rs 10 billion. Management expects to complete its brownfield garment expansion of 30 million pieces by H1 FY25, enhancing its total capacity to ~177 million pieces. Post expansion, management expects quarterly garment production volumes to touch ~45 million pieces from Q3 FY25. It expects subdued cotton prices and gradual recovery in exports to aid profitability, in the event of challenging market conditions. Near term, KPR would focus on investing in the textiles division, considering the uncertainty and restrictions imposed on the use of sugar syrup/juice to produce ethanol. We have raised FY25E/FY26E revenue by 8%/4% to factor in expected higher volume growth in garments and sugar, which explains the 9%/5% increase in EPS. Reiterating Buy with a target price of Rs 971 (earlier Rs 923), based on 25 times FY26E earnings. .Key risks:Lower: garment realization,export demand, andsugar production..Click on the attachment to read the full report:.Vardhman Textiles Q4 Results Review - Healthy Operating Performance, Inline With Estimates: Systematix.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."

KPR Mill Q4 Results Review - Higher Garment, Sugar Volumes To Drive Growth In FY25: Systematix

The company plans to scale up its FASO brand in South India and aims to generate ~Rs 1 billion revenue over the next three years from Rs 250 mn in FY24

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KPR Mill Q4 Results Review - Higher Garment, Sugar Volumes To Drive Growth In FY25: Systematix

The company plans to scale up its FASO brand in South India and aims to generate ~Rs 1 billion revenue over the next three years from Rs 250 mn in FY24

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