AGI Greenpac Ltd. share price target

We initiate coverage on AGI Greenpac (AGI) with BUY and Sep-26E TP of Rs1,520 based on DCF method, implying 19x Sep-27E EPS. AGI is a leader in the Indian container glass (CG) industry with >20% market share.

HSIL's Q3 operating profit came in ahead of our estimates with EBITDA at Rs1.1bn vs. estimated Rs749mn and OPM at 14.6% against estimated 11.7%, led by strong performance of the packaging segment (OPM up 3.3pp/13.2pp yoy/qoq). Revenue growth of 27% yoy was led by Consumer (+54.7%yoy), Packaging (+29.9%yoy), and Building products (+21%yoy) segments. Revenue growth in the Building products segment was driven by the Pipes category. EBIT margin expanded 130bps yoy/610bps...

HSIL Limited (HSIL) is an Indian company, which offers sanitaryware products, faucets and glass bottles. The companys segments include building products division, packaging products division and others division (retail, consumer, pipes, caps and closures, e tc.) The companys ~46% re venue comes from building products division, ~43% from ..

Despite adverse dynamics of the glass industry, HSIL's packaging products segment has turned EBIT positive through corrective measures like shutting down capacity, change of fuel mix from furnace oil to pet coke, rationalization of overheads & judicious price hikes. Revival in glass industry will boost sales for HSIL.

HSIL, which enjoys 40% market share in sanitary ware. The company has been expanding the premium product range, enhancing product basket, expanding distribution network. This will benefit the company to generate strong revenue and better margins as compared to peers.

HSIL's reported standalone numbers for 4QFY2016 have come in mostly in-line with our estimates. The top-line grew by 6.6% yoy to Rs596cr. The raw material cost declined by 77bp yoy to 39.9% of sales while employee and other expenses increased by 139bp yoy and 168bp yoy to 11.1% and 32.4% of sales, respectively. As a result, the EBITDA mar..

During Q2FY16, the company reported flat revenue growth of 1.3% to Rs. 4294 Mn on YoY basis, due to subdued demand. During the same period, the Building Products Division (BPD) grew by 8.9% to Rs. 2469 Mn while the Packaging Product Division (PPD) reported de-growth of 7.5% to Rs. 1817 Mn. The revenue contribution from the BPD stood at 57% while the contribution from PPD was at 42%. The overall EBITDA (%) of the company remains flat at 17.61% on YoY basis but improved on QoQ basis from 15.5% in the quarter ended June 2015.

HSIL reported a mixed set of numbers for 2QFY2016. The standalone top-line was muted, managing to grow by a mere 1.3% on a yoy basis to Rs429cr. The raw material cost declined by 54bp yoy to 30.3% of sales and other expenses declined by 120bp yoy to 39.1% of sales. However, employee costs increased by 178bp yoy to 13.0% of sales and as a result, the EBITDA margin remained flat on a yoy basis at 17.6%. The bottom-line grew by 27.6% yoy to Rs24cr, mainly on account of lower interest expense. Dampening construction scenario, Management cautious on guidance: The Management toned down its growth guidance for the Building Products segment (in the post-1QFY2016 conference call). The Management indicated that there is overall sluggishness in the new construction market due to delayed project completions which is on account of piling up inventory and it is likely that the scenario will continue to persist in the near future. New constructions account for 88-90% of the segments business and the balance is from replacement demand. The demand scenario in the metros and in Tier-I cities is likely to remain under pressure and the company intends to penetrate Tier-II and Tier-III cities to achieve...

The company enjoys almost 40% of the total organized market share in the sanitaryware industry. The entire industry size is approx Rs. 35000 mn of which the organized players have market share of 65% in FY15. The organized market is growing at an average rate of 20% since 2011, faster than the unorganized market.

Building products segment disappoints again: The segment grew only 6% in a seasonally strong quarter with margins contacting 450bps to 19%. The management said that the quarter'slowgrowthwasbecauseof(1)slownessintheinstitutionalsegmentwhereofftake...