Firstcall Research is bullish on DCW and has recommended buy rating on the stock with a target of Rs 16 in its March 20, 2013 research report.
“DCW Ltd (formally Dhrangadhra Chemical Works Limited), the Company controlled by the renowned Sahu Jain family, was incorporated in January 1939 to take India’s first Soda Ash factory in Dhrangadhra, Gujarat. Its ownership was acquired in the year 1949 by Padmabhushan Late Shri Sahu Shriyans Prasad Jain. DCW has expanded, diversified and modernized its operations and is a Public Limited Company with a diversified range of products for supply to customers in both, domestic and international markets. Its corporate logo, the “horse shoe” has earned respect and recognition, and is widely acknowledged as a symbol of excellence. DCW has generated great success to emerge as one of India’s fastest growing multi-product multi-location chemical companies. DCW is an industry pioneer with a strong presence in the Chlor-Alkali, Synthetic Rutile and PVC business segments, with a successful record of innovation and in pioneering new products and processes. Its competitive edge is further enhanced by the diversity of its products.”
“DCW Ltd a diversified range of products for supply to customers in both, domestic and international market, reported its financial results for the quarter ended 31st DEC, 2012. The THIRD quarter witnesses a healthy increase in overall sales as well as profitability of the company. The company’s net profit jumps to Rs.281.46 million against Rs.41.73 million in the corresponding quarter ending of previous year, an increase of 574.48%. Revenue for the quarter rose 15.88% to Rs.3635.01 million from Rs.3136.87 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.1.34 a share during the quarter, registering 530.64% increase over previous year period. Profit before interest, depreciation and tax is Rs.672.13 millions as against Rs.288.55 millions in the corresponding period of the previous year.”
“At the current market price of Rs 14, the stock P/E ratio is at 2.52 x FY13E and 2.11 x FY14E respectively. Earnings per share (EPS) of the company for the earnings for FY13E and FY14E are seen at Rs.5.55 and Rs.6.64 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 69% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 2.47 x for FY13E and 2.20 x for FY14E. Price to Book Value of the stock is expected to be at 0.54 x and 0.43 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 16 for medium to long term investment,” says IIFL research report.
Institutional holding more than 40% in Indian cos
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