Buy Garden Silk Mills;target of Rs 120: Moneyvidya.com

The financial position of Garden Silk Mills has been improving for the last few years and new capacity scheduled to come on line this year will help achieve better economies of scale.  This combined with their entrance into new segments like party wear and wedding wear under the strong brand of Vareli, and new markets like China, Egypt, Europe, Latin America should give sufficient opportunity for growth in top line. This should reflect in top line during last 2 quarters of this financial.  The stock is available at 4x PE, low compared to a peer average of 6x. They have a strong dividend record with an 18% payout scheduled for 2010. Book value is Rs 115. Technically there is strong support for this stock at 76 levels on the lower side. Accumulate on declines and look for a break above 84 to take the stock to further highs. Buy Garden Silk Mills with a 1 year target of 120,” says moneyvidya.com research report.

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