Buy Cheviot, target Rs 892: Rudra Shares and Brokers

Manali Bhatia

The flagship of Cheviot Group witnessed substantial growth in production with better capacity utilisation during the FY18 and significant growth in exports. Cheviot's export oriented unit at Falta Special Economic Zone has been at ease.

It offers a series of jute shopping bags, pick according to need, essentially for promotional, fashion, beach, etc. Efforts are being made to increase customer base in conventional and diversified hessian fabrics.

The company has reported net sales of Rs 101.84 crore during the quarter ended September 30, 2018 as compared to Rs 90.44 crore in the previous quarter. Cheviot has a negligible debt with low equity and around Rs 250 crore of investments, is financially sound.

Moreover, a nod to raise jute packaging for food grains to 100 percent from 80 percent and 20 percent for sugar in 2018-19 would provide a push to the stock. Barring unforeseen circumstances, the outlook for the current year appears to be promising. We value cheviot at Rs 892, which corresponds to 10x P/E.