ICICI Securities: Visaka Industries - ACS To Drive Rapid Earnings Growth
Asbestos sheet-roofed houses in a narrow bylane in Motilal Nagar that’s set to go for a redevelopment. (Photographer: Ashwini Priolker/BloombergQuint)

ICICI Securities: Visaka Industries - ACS To Drive Rapid Earnings Growth

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

FY21E is likely to be one of the most profitable fiscals for Visaka Industries Ltd. in the last decade despite the ongoing pandemic. The profit will be largely attributed to the sudden demand tailwind in the company’s asbestos-cement roofing sheets (ACS) segment. The higher farm income, recent labour migration to rural areas, record rabi crop production and expectation of normal monsoon this fiscal has led to a sharp improvement in demand and pricing for the ACS segment (refer Table 1). Improving profitability and strong free cash flow (FCF) generation would see substantial paring of debt resulting in 340 basis points improvement in return on capital employed (RoCE)s in FY21E. Higher CFs from ACS in the near term would help build incremental capacities in Vnext and in turn structurally improve earnings visibility over the next few years. Visaka Industries is available at 5.9 times FY22E earnings, which seems attractively valued at these levels.

Click on the attachment to read the full report:

ICICI Securities Visaka Update.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint 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 brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.