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Buy Prabhat Dairy Ltd. target Rs 140: ICICI Direct

Buy Prabhat Dairy Ltd. at a price target of Rs 140.

Last Updated: Jun 19, 2017, 09.36 AM IST
ICICI Direct has Buy call on Prabhat Dairy Ltd. with a target price of Rs 140 .

The current market price of Prabhat Dairy Ltd. is Rs 121.25.

Prabhat Dairy (Prabhat), established in 1998, has evolved from a specialty dairy ingredients company to an emerging brand in the dairy industry.

It sells its products as: a) ingredient products or co-manufactured products to institutional clients, which currently constitute 70 per cent of its sales and b) retail consumer brands (Prabhat, Prabhat Milk Magic, Prabhat Flava, Volup), which comprise the remaining sales.

Aided by increasing capacity utilisation and share of value added dairy products (VADPs) in revenue, ICICI Direct expects the company to post revenue CAGR of 14.3 per cent over FY17-19E with an EBITDA margin of 10 per cent in FY19E.

With the end of the investment phase and increasing capacity utilisations across categories, it expects return ratios of the company to improve gradually in future.
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