IVP Ltd : Neutral price, average fundamentals

IVP Ltd relative valuation is now NEUTRAL. It was previously rated OVERVALUED, and has a fundamental analysis score of 56.

Our analysis is based on comparing IVP Ltd with the following peers – Navin Fluorine International Limited, Styrolution ABS (India) Limited, Southern Online Bio Technologies Limited, Paushak Limited, Laffans Petrochemicals Limited, Balaji Amines Limited, Amines & Plasticizers Ltd. and Diamines & Chemicals Ltd. (532504-IN, 506222-IN, 532669-IN, 532742-IN, 524522-IN, 530999-IN, 506248-IN and 500120-IN).

Relative Valuation

IVP Ltd is currently neutrally valued, as its previous close of INR 47.25 lies within the CapitalCube estimate range of INR 36.52 to INR 47.61. Over the last 52 week period, IVP Ltd has fluctuated between INR 34.80 and INR 73.25.

Relative Valuation

Company Overview

  • Relative underperformance over the last year and the last month suggest a lagging position.
  • IVP Ltd trades at a lower Price/Book multiple (0.94) than its peer median (1.34).
  • The market expects 507580-IN to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • 507580-IN has a successful operating model with relatively high net profit margins and asset turns.
  • Changes in annual earnings are in line with its chosen peers but lags in terms of revenue, implying the company is cost conscious and selective about spending for growth.
  • Over the last five years, 507580-IN‘s return on assets has improved from below median to better than the median among its peers, suggesting that the company has improved its relative operations markedly.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • While 507580-IN‘s revenues growth has been below the peer median in the last few years, the market still gives the stock a PE ratio that is around peer median and seems to see the company as a long-term strategic bet.
  • The company’s capital investment program suggests it is under-investing in a business that is producing peer median returns.
  • 507580-IN has the financial and operating capacity to borrow quickly.

Investment Outlook

IVP Ltd has a fundamental score of 56 and has a relative valuation of NEUTRAL.

IVP Ltd’s Fundamental Analysis Score is about average at 56, thus not allowing for a specific classification into the Value – Price Matrix.

Fundamentals Vs Relative Valuation

Drivers of Valuation

The market expects 507580-IN to maintain the median rates of return it generates currently.

The market expects 507580-IN to grow at about the same rate as its chosen peers (PE of 10.72 compared to peer median of 10.72) and to maintain the peer median return (ROE of 8.84%) it currently generates.

The company trades at a lower Price/Book multiple of 0.94 compared to its peer median of 1.34.

Valuation Drivers

507580-IN has moved towards a median ROE and PE from a relatively high PE profile at the recent year-end.

ROE % (On Common Equity)
Price To Earnings

Peer Analysis

A complete list of valuation metrics is available on the company page.

Company Profile

IVP Ltd. manufactures and exports foundry chemicals, castings and allied products. It manufactures water based coatings and alcohol based coatings. The company’s products are used by automobile, machine tools, wind mills, railways sectors. Its products include binders, coatings and innoculants & fluxes. It was founded on July 5, 1929 and is headquartered in Mumbai, India.

Disclaimer

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