See 50% appreciation in Solar Industries: Choksey

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See 50% appreciation in Solar Industries: Choksey

See 50% appreciation in Solar Industries in 12-18 months time, says Deven Choksey, MD of KR Choksey Securities.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Deven Choksey See what other Experts & Brokerages are saying about Solar Ind See messages about Solar Ind Solar Ind BSE | NSE 01/06/12 Are Mutual Funds betting on Solar Ind?

See 50% appreciation in Solar Industries in 12-18 months time, says Deven Choksey, MD of KR Choksey Securities.

Choksey told CNBC-TV18, "We like Solar Industries because it has got a very good business model. They are into industrial explosive business. An industrial explosive business is required for the mining and the construction activities for explosive purpose."

He further added, "This company is very well positioned, they have locations in India and in other parts of the world particularly Africa, they are also getting in Indonesia. Because of this location advantage that they have which is close to the mining activities, they are in a position to supply their explosives to their customers relatively with higher degree of comforts."

"In-turn this company is winning lot of customers and in the process they are operating at a highest efficiency level into the explosive business. The operating margins and the growth in the business is around 25-30%, this company offers good amount of opportunity to buy at current levels."

"They are also into coal mining business. In the coal mining business, one of their mine has already got the clearance from government of India and second mine is in the process of obtaining the clearance. So once these two mines are also starting to operate for the coal exploration or if they end up selling these mines this is going to be huge bonanza or inflow of money which would come to the existing shareholders of Solar Industries."

"We value this company on sum of the part basis wherein we value the coal business at around Rs 235 and we also value the industrial explosive business at around Rs 730 odd. This gives us a comfort level of price target of around Rs 950 for this financial year or maybe over 18 months from now. So, to a greater extent this company is comfortably placed and it could give 50% plus kind of appreciation when it is held for 12-18 months."