Following is an extract from a report done by Asha Phillips stock broker few weeks back (before KGAL publish their results). Hope this will help your decision making.
Company : Kegalle PlantationPLC
Sector : Plantation
Market Price : Rs 220/-
Introduction
Kegalle plantations PLC engages in the cultivation, manufacture, and sale of tea and rubber primarily in Sri Lanka. The company also offers coconut, cardamom, and other agricultural products. It exports its products to Vietnam and Rotterdam. Further, company comprises 21 estates which in total have a land base of 10,000 Ha in and around Kegalle & Badulla district. Company mainly engages in rubber production with a land area of 4,900 Ha while tea & coconut accounts 1,400 Ha & 500 Ha respectively.
Key Financials
.....................LKR Mn.........9M 2010/11.......9M 2009/10........Growth
Revenue.................................2,091...............1,524..............37%
Profit After Tax.........................568...................129..............340%
Shareholders Funds...................2,202...............1,472..............50%
Total Assets............................3,637................2,991.............22%
EPS........................................22.87.................5.26.............335%
Annlualised EPS.........................30.49...............14.63
NAV (as at 31st Dec).................88.07 58.89
Relative Valuation
MPS 220.00
Traling PER 7.21
Sector PER 16.70
Market PER 26.20
Relative Valuation
Investment Rationale
KGAL is the largest rubber manufacturer and passed the golden quarter during the Jan- Mar 2011 with the rocketing prices of rubber. During the February, Rubber Prices reached its peak level and largest rubber manufacturer highly benefited from the prevailed market opportunities.
KGAL yet to publish its final quarter results and it is expected to result in an increased EPS based on last quarter and possible price range should go beyond this calculation. Based on available figures, KGAL is trading at 7.21X PER with a 76% discount against the sector PER of 16.7X. It is recommended that this is a good buy for short & medium terms based on prevailing market conditions.