HSIL Ltd Q1FY16 Result/Concall Update By IndiaNivesh

At CMP of Rs 313, HSIL trades at PE of 23.5x and 20.2x its FY16E and FY17E earnings of Rs 13.3 and Rs 15.5 per share respectively. The company’s dismal performance is a reflection of bleak demand scenario which is a short term phenomenon in our opinion. The long‐term outlook of the building products sector continues to be robust and HSIL should be the key beneficiary in such an event. Packaging products segment has attained breakeven in FY15 and is likely to improve performance going forward. However, near term pressure cannot be overlooked. We have revised our estimates taking into consideration the current scenario and would revisit them post witnessing uptick in demand. One of the key triggers for the stock would be the separation of building products and packaging products business which would reduce the volatility in segmental performance. Recent correction in stock price provides an opportunity to accumulate the stock. We maintain BUY rating on the stock with revised SOTP based target price of Rs 396 per share (earlier price target was Rs 434)

HSIL-IndiaNivesh-Q1FY16-Update