We at GEPL had recommended Camlin Ltd to our investors few months back when the stock traded around Rs.25 levels. Currently, Stock trades well above Rs.35 and has given a return of 40% in less than 2 months. Despite the increase in share price we continue to maintain our buy call on this counter.
Company had recently declared their results for the June ended quarter where revenues have increased by 14% on yearly comparison at Rs.120.5 cr while EBITDA margins remained steady at 12.8%.
We expect the momentum in performance to continue and expect Camlin Ltd to deliver 30% YoY growth for FY11 at Rs.430 cr with EBITDA profits of Rs.40.4 cr.
Key triggers for maintaining growth rate in camlin ltd would be increasing portfolio of signature pens which is a high margin product. Company also has focus on its pre school business.
Currently Camlin Ltd has only 1 per school operational in Mumbai with a student base of 150 and company plans to start 2 more schools in FY11 with student base of 100 each.
Hence, we continue to maintain our buy recommendation on Camlin Ltd with target price of Rs.60.