Shankara Building Products Ltd (SBPL) is one of the leading organized retailers of
home improvement and building products in India. Shankara offers a
comprehensive range of products including cement, structural steel, TMT bars,
hollow blocks, pipes & tubes, roofing solutions, tiles, sanitary ware, water tanks,
plywood, kitchen sinks, lighting and other allied products. Considering the company’s strong retail presence,
diversified product offering, substantial same store sales growth (last five years
average growth is 23%) and robust retail revenue of ~29% over FY2012-16, we
expect that SBPL to witness higher revenues from its retail business going ahead.
At the upper end of the price band, the pre issue P/E multiple works out to be
18.2x of its annualized 9MFY17 numbers. On EV/Sales, the issue is valued at
0.6x of annualized 9MFY17 numbers. Considering its long term prospects and
reasonable valuation, we recommend Subscribe rating on this issue.

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