Buy Parekh Aluminex; target of Rs 385: Firstcall Research

"Parekh Aluminex Ltd a Mumbai based company established in 1994, headed by Mr. Amitabh Parekh (Chairman and Managing Director). The Company engaged in the manufacture of aluminium foil containers (AFC), aluminium lids and aluminium foil rolls of various sizes, shapes and thicknesses as per customer requirements. The Company's products are used in packaging food items in households, travel and hospitality sectors (airlines, railways, fast food chains, restaurants, hotels, among others). An increasing number of people prefer to use aluminium food packaging containers today and eight out of ten aluminium packaging containers used in India are manufactured by Parekh Aluminex. As the result is that in the span of only five years, Parekh Aluminex more than five folded its cash profit to 1,114.37 million and emerged as the largest aluminium container packaging company in Asia."

"The Company's products are sold in domestic and international markets more than 30 countries across continents. Around 11 percent of the Company`s revenues were derived from exports. In India, the Company supplies products to wholesalers, airlines, Indian Railways, bakeries, retail outlets and catering companies, among others. The Company provides customised products through a bank of more than 180 multicavity moulds. This enhanced acceptance of the Company's products in Indian and international markets especially in an environment of limited mould supply. Company has established good manufacturing practices in accordance with international standards. APL accredited with certification from BRC (British Retail Consortium) implying compliance with Global Standards for packaging & packaging materials."

"Parekh Aluminex Ltd disclosed a phenomenon rise in standalone net profit for the quarter ended December 2011. During the quarter, the profit of the company surged 41.56% to Rs 221.50 million from Rs 156.47 million in the same quarter previous year. Net sales for the quarter rose 50.00% to Rs 3450.99 million from Rs 2300.70 million, when compared with the prior year period. It reported earnings of Rs 17.10 a share during the quarter, registering 41.45% increase over previous year period."

"At the current market price of Rs.335.00, the stock is trading at 5.19 x FY12E and 4.15 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.64.49 and Rs.80.77 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 35% and 31% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 1.83 x for FY12E and 1.53 x for FY13E. Price to Book Value of the stock is expected to be at 0.96 x and 0.78 x respectively for FY12E and FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 385 for medium term investment," says Firstcall Research report. 

FIIs holding more than 30% in Indian cos

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