Expect 40-50% upside in RSWM: Chabria

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Expect 40-50% upside in RSWM: Chabria

Investment Consultant Sanjay Chabria is of the view that one can expect 40-50% upside in RSWM.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See previous views by Sanjay Chabria See what other Experts & Brokerages are saying about RSWM See messages about RSWM RSWM BSE | NSE 30/05/12 Are Mutual Funds betting on RSWM?

Investment Consultant Sanjay Chabria is of the view that one can expect 40-50% upside in RSWM .

Chabria told CNBC-TV18, "Rajasthan Spinning new name is RSWM. It is part of the LNJ Bhilwara Group, it's the leading manufacturer of synthetic yarn and fabrics in the country. The company has a well-established fabric brand Mayur Suiting in the domestic market. The company is undergoing a capacity expansion plan under which it will be investing Rs 900 crore for all its capex plans till FY2009."

He further added, "The investment plan includes setting up of 46-megawatt thermo power plant, a denim production unit, garment initiative and various expansion and modernization plan for the yarn business. Once these plants are commissioned RSWM total spindles will increase from 3,80,000 to about 5,00,000 spindles in the next 12-15 months. The target of around 40-50% upside from the current levels because the company's operating margins will get a good boost after the thermal power plant goes on stream in the next 2 months. This target will achieve in the next 6-8 months because the current valuations are very cheap."