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Buy KPR Mill: target of Rs 980 : Sharekhan

Sharekhan is bullish on KPR Mill has recommended buy rating on the stock with a target price of Rs 980 in its research report dated December 10, 2020.

December 11, 2020 / 02:07 PM IST
 
 
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Sharekhan's research repor on KPR Mill


KPR Mill’s (KPR’s) new garment capacity of 42 mn pieces (total capacity will be 157 mn pieces) will start operating from mid-FY22. New capacity to add ~Rs. 150 crore and ~Rs. 500 crore in FY2022/23. Recent spike in COVID-19 cases acts as a risk to exports (especially to European market) in the short term. However, increasing demand for Indian textile products in the key export markets and augurs well from a medium term perspective. Increase in contribution from high-margin garment business and value-added products would help margins improve y-o-y (management targets OPM of 23%). RoE and RoCE will move above 20% in FY23.


Outlook


With OPM of ~20%, lean balance sheet and improving return ratio KPR is one of the better plays in textile space. We recommend a Buy on the stock with a PT of Rs. 980.


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.

Broker Research
first published: Dec 11, 2020 02:07 pm

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