CCL Products (India) Ltd Research Report By Karvy

At CMP of Rs 181, CCLP trades at 14.6x FY17E earnings. For the past 1 year, the stock is trading at an average 2 year forward PE of 13.5x. Given the sales CAGR of 18.5% in FY14-17E driven by growth in sales volume in its India & Vietnam operations, sound cash flows and healthy return ratios, the valuations appear to be reasonable and the company is fairly valued. We assign a ‘HOLD’ rating for a price target of Rs 204 equivalent to 16.5x FY17E, arrived by mapping book value to 4.4 after discounting the future growth prospects, which represents an upside potential of 12.7%.

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