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ICICI Securities retains buy on Insecticides India, revises target price to Rs 737

ICICI Securities has retained buy rating on Insecticides India in the long term and revised target price to Rs 737 from Rs 832. Shares of Insecticides India ended up 1.9% at Rs 475 on Thursday while BSE Sensex closed 115.35 points up at 41,673.92.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 503.10 crore, up 40.39% from last quarter sales of Rs 358.36 crore and up 9.77% from last year same quarter sales of Rs 458.34 crore. The company has reported net profit after tax of Rs 48.81 crore in the latest quarter.

The company’s top management includes Mr.Hari Chand Aggarwal, Mr.Navin Shah, Mr.Rajesh Aggarwal, Mr.S Jayaraman, Mr.Vinod Kumar Mittal, Mr.Vrijesh Kumar Gupta, Mrs.Nikunj Aggarwal. Company has S S Kothari Mehta & Co as its auditors. As on 30-09-2019, the company has a total of 20,667,796 shares outstanding.

Investment Rationale

The brokerage is positive on the company due to — 1) Strategy to launch high-margin products and prune low-margin products; 2) Performance of new launches in FY19 is also satisfactory; and 3) Expected reduction in inventory and lower capex will generate cumulative free cash flow of Rs 290 crore over FY19-22, which will be used to reduce debt.

Source: Economic Times