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Last Updated : Jan 03, 2014 11:32 AM IST | Source:

Buy Bannari Amman; target Rs 140: Sunidhi Securities

Sunidhi Securities is bullish on Bannari Amman Spinning Mills (BASML) and has recommended buy rating on the stock with a target price of Rs 140 in its December 30, 2013 research report.

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Sunidhi Securities' report on Bannari Amman Spinning Mills (BASML)

"BASML is positioning itself as a niche player specializing in fine counts and other value added segment and making every effort to earn relatively higher margins. Since inception BASML has evolved to be a leader in cotton yarn spinning in South India, commanding a premium in the market for its products. Participating across value chain will help the company to be a One-Stop-Shoppe player and face the growing competition going forward. This also help BASML to customize its product offerings as the global retailers are rationalizing the vendor base based on quality, specifications and pricing. With consistent modernization and expansion with machinery of latest technology, BASML is able to improve efficiency and successfully face global competition."

Valuation & Recommendation: "The expansion of its spinning unit and integration into fabrics and home textiles has enabled BASML to compete in the export markets with larger scale of operations. The higher value addition insulates it from pricing pressures in the highly commoditised cotton yarn industry. At the current market price of Rs 105, the share is trading at a P/E of 3.9x on FY14E and 2.8x on FY15E. We recommend BUY with a target price of Rs 140 at which the share will trade at a P/E of 3.75x on FY15E," says Sunidhi Securities research report.


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First Published on Jan 3, 2014 11:32 am
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