Moneycontrol PRO
Open App

Buy Debock Industries; target of Rs 65: Khambatta Securities

Khambatta Securities is bullish on Debock Industries has recommended buy rating on the stock with a target price of Rs 65 in its research report dated August 26, 2022.

August 26, 2022 / 04:11 PM IST
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Khambatta Securities' research report on Debock Industries


Jaipur-headquartered Debock Industries operates across three verticals, viz. Farm Equipment & Seeds, Mining, and Hospitality. Currently 99% of the company’s revenues comes from the farm equipment and seeds business with the small remainder contributed by hospitality. The agri-products (farm equipment and seeds) business is a steady and the main revenue generator for Debock, aided by its monopolistic power and subsidy. The Rajasthan government’s 30% subsidy offer and 0% GST on farm equipment is a key driver for Debock’s sales. The management observed that the company does not have any major competition in Rajasthan. Healthy growth in production, productivity and harvest price indicate an increasing trend in farm income in Rajasthan. With a widespread practice of mechanised agriculture and a well-established market for farm equipment (Rajasthan has higher-than-national average farm power availability, especially in the western part), the state presents a strong opportunity for farm equipment manufacturers and suppliers.



Outlook


The Debock stock currently trades at an attractive forward multiple of 5.4x FY24E EPS. With nearly a half of FY24E revenues forecast to come from mining, which is a completely new vertical for the company, we value Debock at a conservative P/E of 8.0x FY24E EPS @ Rs 65, informing an upside of 49% from current levels, as we initiate coverage on the company with a BUY rating.

Close

For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Debock Industries - 260822 - khamb

Broker Research
first published: Aug 26, 2022 04:11 pm
Sections
ISO 27001 - BSI Assurance Mark