Rahul Arora, CEO at Nirmal Bang Institutional Equities told CNBC-TV18, "CCL Products has been a phenomenal stock. We had initiated it about Rs 70. It is at a new Rs 52-week high, close to Rs 225. I still think it could potentially be a two-bagger from here. I think with all the run up it has had, it is still going at about 15 PE for a company and that is giving you about 25 percent return ratios. You have to hunt the market to find something that is giving you a 25 percent RoE and RoC."
"It is going to be giving Rs 250 crore worth of free cash flow over the next two years. 5.2 percent free cash flow dividend yields on the company. The Indian operations surprise is dramatically, they are ramping up capacity in Vietnam, that is by and large taking care of in terms of the capex that they have already incurred. So, the return on capital employed would be jumping by over 900 basis points in the next two years," he said. "We have a stated price target of Rs 272 in the stock but the way the company is delivering, I wouldn’t be surprised that the price target keeps rolling forward. It is very hard to find a 15 PE company at 25 return ratios. It will probably be one of our top three midcap ideas, it has been and it probably will continue to be."
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
