Butterfly Gandimathi Shares Hit ATH For 2nd Day On Healthy Q1Fy23 Performance

Butterfly Gandimathi in the previous day's trade made solid gains and in trade today on Friday (July 15, 2022) is up by over 1 percent again hitting a fresh 52-week high of Rs. 1684 per share. This is also the stock's all time high price.

As per ICICI Direct, the company reported a healthy operational performance in Q1FY23. On a favourable base, revenue grew 76% YoY to Rs. 253.5 crore with an impressive three year CAGR of 19%. Higher RM inflation during Q1FY23 continued to pressurise gross
margins, which were at 35.5% vs. average 40- 42%. However, better cost efficiencies and decline in other expenses (possibly owing to
synergies kicking in post acquisition by Crompton) resulted in the company reporting strong EBITDA margins of 10.2% (up 470 bps
YoY). Absolute EBITDA grew 3.2x (on a tepid base) to Rs. 25.6 crore with a healthy three year CAGR of 30%. Tracking robust operational performance, the company reported PAT worth Rs. 13.3 crore vs. Rs. 0.9 crore in Q1FY22.

Further the brokerage views it to be positive for the company and iterates, "Prices of key raw materials such as steel and aluminum have corrected by ~20% and 35%, respectively, in the past three months. This should provide some respite to gross margins, going forward. With gross margins normalising and synergies kicking in, BGAL could potentially clock in strong EBITDA margins of 12-14% (vs. historical average of ~7%). Furthermore, Crompton's acquisition would enable BGAL to access its strong dealer network in new geographies (mostly North India), which will enable it to penetrate these markets faster and accelerate its revenue growth.

Butterfly Gandimathi is a small cap firm into manufacturing of domestic kitchen and domestic electrical appliances. The Company is engaged in manufacturing LPG Stoves, Mixer Grinders, Table Top Wet Grinders and Pressure Cookers.