GHCL Q1FY17 Result Update Research Report By Emkay

We have upgraded our FY17/18E EPS by 8%/5% respectively as we advance our revenues estimates on the back of improving volumes for soda ash and textiles business. Further, higher operating efficiency in organics chemicals segment and lower interest cost will result in higher PAT growth. We assign higher target multiple of 7xFY18E EPS (from earlier 6x) as we see strong visibility of earnings and improvement in return ratios supported by sustained reduction in debt. We reiterate BUY recommendation with revised TP of Rs 280 based on 7x FY18E EPS of Rs 40.