ICICI Securities is bullish on Visaka Industries has recommended buy rating on the stock with a target price of Rs 250 in its research report dated May 29, 2020.
ICICI Securities research report on Visaka Industries
Visaka Industries (VSKI) has reported better-than-expected EBITDA margin in Q4FY20 at 9% (I-Sec: 7.3%), down 240bps YoY due to higher gross margin of 430bps YoY. Vnext and Synthetic yarn segments reported improvement in EBITDA margin by 180bps & 320bps YoY, respectively. However, ACS segment has reported a sharp decline in EBITDA margin by 560bps led by ACS revenue declining 35% YoY due to the lockdown. Vnext segment has reported only 2.5% YoY decline in revenue despite lockdown with incremental volume from new Jhajjar plant.
Outlook
We expect ACS being rural centric & need-based product to have lesser impact on revenue than other two segments in the near term. With stock price correcting significantly amid Covid-19 crisis, we believe valuations are compelling at 5.3x FY20. Maintain BUY.
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.
Read More