KPR Mill Share Price Target: KPR Mill, a prominent player in the Indian textile industry, exhibited a mixed performance for the fourth quarter of fiscal year 2024. Despite a notable decline in revenue, enhanced margins in EBITDA and PAT present an optimistic outlook, particularly with strategic capacity expansions on the horizon.
KPR Mill Share Price
KPR Mill’s fiscal year closed with a 13% year-on-year decline in revenue, totaling Rs. 1,697 crore. The dip primarily stemmed from the sugar segment, which saw a substantial 50.1% drop. Conversely, the textile sector managed a modest growth of 2.9%, indicating resilience amidst broader market challenges.
However, the company’s profitability metrics painted a brighter picture. EBITDA margins improved significantly by 332 basis points year-on-year, reaching 19.7%. Similarly, profit after tax (PAT) saw a slight increase of 1.9%, culminating in Rs. 214 crore.
Looking ahead, KPR Mill is poised for considerable expansion. The company anticipates completing additional garment production capacity in the first half of fiscal 2025, aiming to produce 40 million pieces per quarter, increasing to 45 million pieces in the latter half. This expansion is expected to stabilize garment margins between 22-24%.
In the sugar sector, production is projected to increase to 2 lakh tonnes in FY2025 from 1.76 lakh in the previous year. However, ethanol production is set to decline from 9 crore litres to 6-7 crore litres. The fluctuation in ethanol volumes has prompted a revision of the company’s financial forecasts for the next two fiscal years.
Management remains optimistic about the recovery and growth prospects. This sentiment is buoyed by increased garment orders, which currently stand at Rs. 1,000 crore. Additionally, the company’s strategic positioning in the global market is strengthened by the potential Free Trade Agreement with the UK and expanding opportunities in the US.
KPR Mill’s stock currently trades at 30 times its projected FY2025 earnings per share and 20 times its enterprise value to EBITDA ratio. With these financial metrics and strategic initiatives in place, the company maintains a strong “Buy” recommendation with a revised price target of Rs. 965.
KPR Mill Share Price Target
| Date | 9th May 2024 |
|---|---|
| Company | KPR Mill |
| CMP (Rs) | Rs. 839 |
| Target Price | Rs. 965 |
| Recommendation | Buy |
| Market cap (Cr) | Rs. 28,683 cr |
| Author | Sharekhan |
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