Buy Haldyn Glass; target of Rs 18: Sunidhi Securities

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Buy Haldyn Glass; target of Rs 18: Sunidhi Securities

Sunidhi Securities is bullish on Haldyn Glass and has recommended buy rating on the stock with a target price of Rs 18 in its February 17, 2012 research report.

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Sunidhi Securities is bullish on Haldyn Glass Ltd and has recommended buy rating on the stock with a target price of Rs 18 in its February 17, 2012 research report.

"Incorporated in 1991, HGL is one of the major players in Clear Glass and Flint Glass container manufacturing segment in India. HGL caters to Liquor, Cosmetic, Food and Pharmaceutical industries. HGL's capacity after the expansion of 165 tpd in 2009 for Rs 32 crore is 1, 08, 000 tpa (320 tpd) located at Village Gavasad, Padra, Dist. Vadodara. The new plant caters to requirements of flint glass, coloured glass bottles and bottles required by cosmetics Industry. HGL's locational advantage gives it a competitive edge with substantial savings in freight cost of raw material and natural gas. This locational advantage comes by its plant's proximity to the mines in Gujarat and Rajasthan and gas fields of ONGC. HGL manufactures two types of glass viz., the clear glass, and vials. The fullfledged in-house design facilities churn out over 500 different shapes and sizes of glass containers. HGL is already catering to all market segments of the glass industry like pharmaceuticals, chemicals, food and beverages, liquor and brewery, cosmetics, ink and stationery."

"During Q3FY12, net profit surged by 33.5% to Rs 6.2 crore (Rs 4.6 crore) on 13.3% higher sales of Rs 46.3 crore (Rs 40.9 crore). OP and NP margin stood at 25.9% and 13.4% as against 21.0% and 11.2% respectively in Q3FY11. (YoY) During 9MFY12, net profit advanced by 24.6% to Rs 16.2 crore on 11.3% higher sales of Rs 128.4 crore. OP and NP margin stood at 24.6% and 12.6% Vs 22.3% and 11.3% respectively in 9MFY11. 9MFY12 EPS works out to Rs 3.0 Vs Rs 2.4 in 9MFY11. HGL is also planning to set-up Bottle Printing and Decorating facilities to provide value addition to the customers, particularly in beverages and processed food processing segment."

"At the CMP of Rs 13, the share of HGL is trading at a P/E of 3.1 on FY12E. We recommend BUY with a target price of Rs 18 in the medium term," says Sunidhi Securities report.

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To read the full report click on the attachment