Olam: IIFL has Add Call. Note that Co. guiding for Net Profit of US$1bn by FY16, implying 26% Cagr over FY11-16 and expects to achieve this target without any further equity dilution.
Co has a strong track record, having achieved 37% PAT Cagr and 23% earnings Cagr over FY05-11, with avg ROE of more than 20% and believe the key risk is the company’s need to constantly look for value-accretive acquisitions. Execution risk and high projected leverage of nearly 2.5x are other risks. Stock is trading at 11x 1-year forward P/E, having corrected 30% YTD.
No comments:
Post a Comment