Q3FY15 Results Preview Of Top Mid-Cap Stocks By Nirmal Bang

We expect the companies in our mid-cap coverage universe to post revenue/EBITDA/net profit growth of 9.5%/13.4%/11.4%, respectively, for the December 2014 quarter on likely strong perfomance from CCL Products (CCL), V-Mart Retail (VRL), Just Dial (JDL), Kajaria Ceramics (KCL), La Opala RG (LORL), Crisil, and JBF Industries (JBF) which are all expected to post more than a 15% EBITDA or net profit growth. Bata India (BIL), Arvind, Greenply Industries (GIL), Havells India (HIL), Supreme Industries (SIL) and Tilkanagar Indusries (TIL) are likely to report weak performance. Additional volume and zero income-tax at Vietnam plant of CCL would drive its net profit 67.2% to Rs288mn. New store addition and festive/marriage demand would drive VRL’s revenue/net profit by 29.8%/29.0% resepectively. Healthy growth in paid listings and operating leverage would drive JDL’s EBITDA 35.3% to Rs451mn. On a low base of 3QFY14 coupled with additional capacity in 3QFY15, KCL would post a 34.3% growth in net profit despite weak demand. Growth in distribution network, launch of new products and better margins would drive LORL’s net profit 27.4% to Rs141mn. On the back of healthy growth in research business and improvement in the rating division, Crisil would report a15.5% growth in net profit. With the revival in domestic profitability, better profit at RAK unit and capacity expansion, JBF Industries would post a 58.6% rise in net profit to Rs440mn. With the problems faced in key markets like Tamil Nadu and Andhra Pradesh, TIL would report a net loss. Lower footfalls and suply chain pressure would exert pressure on same-store sales growth for BIL. Inventory loss in the textile division because of falling cotton prices and weak Diwali demand at Megamart would hurt Arvind’s profitability. Subdued demand for plywood would hurt GIL. Weak domestic growth at 7.5%, higher pension liability of Sylvania and currency volatility in Latin America would hurt HIL. Inventory loss because of a fall in crude oil prices would hurt SIL.

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