Buy Visaka Industries; target of Rs 850: Anand Rathi
Anand Rathi is bullish on Visaka Industries has recommended buy rating on the stock with a target price of Rs 850 in its research report dated November 16, 2021.
November 18, 2021 / 12:37 PM IST
Anand Rathi's research report on Visaka Industries
Healthy V-Next products and a stabilising yarn division helped a seasonally weak Q2. Higher costs are expected to be temporary, and price hikes of AC roofing sheets would help. The expansion (AC roofing sheets, boards) is ending, and phase-II capex will be for the recently launched green products. We retain a Buy rating, at a TP of Rs.850 (earlier Rs.1,079) Expansion to boost growth. AC roofing sheets operated at 72% capacity; V Next at a healthy 94%, leading to the BP division revenue growing 19% y/y to Rs2.4bn. Higher costs, though (cement/pulp/logistics, etc.), hurt margins, which fell 602bps to 13.4%. The 100,000-ton expansion of AC roofing sheets by Jan’22 (and 50,000 tons of boards by Dec’21) would address higher demand generated by a good monsoon and improving rural demand.
We introduce FY24e and retain our Buy rating, with a TP of Rs.850, assigning a 9x multiple to FY24e EPS.
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