For 3QFY2017, Mirza International (MIL) posted results which were below our
estimates on both, the top-line and the bottom-line fronts. Revenues de-grew by
~6% yoy, lower than our estimate. However, on the operating front, the company
reported margin improvement on the back of lower raw material cost, which
therefore, lead to double digit profit growth on the bottom-line front. We expect MIL to report a net revenue CAGR of ~7% to
~Rs1,069cr over FY2016-18E on the back of strong growth in domestic branded
sales (owing to aggressive ad spends and addition in the number of EBOs &
multi-brand outlets [MBOs]) and healthy export revenues. On the bottom-line
front, we expect a CAGR of ~8% to Rs90cr over the same period on the back
of margin improvement. Thus, we maintain our Buy rating with the Target
Price of Rs107.

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