Like KPR Mill: Daljeet Singh Kohli

Daljeet Singh Kohli, Head of Reresearch at India Nivesh Securites told CNBC-TV18, "For KPR Mill, 90 percent of the business comes from cotton and 10 percent is sugar. Incidentally sugar is also in a good state though we don’t have a buy call on sugar. So we are not buying KPR Mills for sure, we are buying it for cotton only. The good part of this company is that it is in the entire value chain. Cotton prices have remained stable in last six-seven months. So it means that it benefits for the garment business because that is an input for garment business. Being into the fully integrated chain, it benefits from that, stable cotton prices despite the fact that there has been issues with weather. Still cotton prices have remained stable, which is beneficial for them." "They have their own captive power generation. Some of it has been power, which is cheaper and for all these companies, power is the biggest cost. So that is again a good thing. It is a kind of a tactic opportunity for all textile company, we continue to like KPR Mill," he said."In terms of valuation, right now at around Rs 820 in P/E multiple it will be around 13 times or 9 times of FY'17 but we have valued the stock at EV to EBITDA multiple. We have given a valuation of Rs 1,053."