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Indian equity markets have performed quite well in the last 4-year term with Sensex advancing about 50% to around 33,800 from the levels of 22,600 with many stocks vastly outperforming the benchmark index.

In the same period under review, shares of an FMCG company have grown unanimously beating the benchmark Nifty FMCG index and the key equity indices Sensex and Nifty. In the last four years, the domestic markets have also seen a number of bumps also such as the recent ones observed on the jitters of LTCG tax, global sell-off, heightened volatility.

Shares of Future Consumer Ltd have surged as high as 1111% in the course of last four years beating the returns of industry heavyweights such as Britannia, Procter & Gamble Hygiene & Health Care and Godrej Consumer Products. The stock of Future Consumer Ltd has moved up by a whopping 1111.7% to Rs 56.95 (9 April 2018) from a share price level of Rs 4.7 (10 April 2014).

The research and brokerage firm Motilal Oswal Securities Ltd have given a buy rating to the stock of Future Consumer Ltd with a target price of Rs 76 which implies an upside of 39% from their recommendation price of Rs 55.

We expect Future Consumer’s sales to grow 45% YoY to Rs 7.7 billion with gross margins expected to expand by 30 basis points YoY to 14.1%, Motilal Oswal Securities Ltd said. We estimate EBITDA margin expansion to the tune of 200 basis points YoY to 2.5%. Following which, we have modelled EBITDA growth of 633.1% and adjusted PAT to change from the loss to profit for the quarter, Motilal Oswal Securities said further. “The stock trades at 2.3x/1.6x FY19E/20E EV/sales; we have a ‘Buy’ rating on the stock,” Motilal Oswal Securities added.

Shares of Future Consumer are categorised under the ‘A’ group of securities on Bombay Stock Exchange. Future Consumer Ltd commands a market capitalisation of about Rs 10,878 crore on the basis of a share price of Rs 56.85 on BSE.

Last modified on Tuesday, 10 April 2018

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