On a longer term we remain positive on company’s strategy with respect to new product capacities (Greenfield project: revenue potential of Rs 450 crore in FY23), import substitution strategy along with strong technical execution capabilities. Further we take solace from the fact that demand in end markets in which company operate are stable.
Kotak Securities recommended accumulate rating on Bodal Chemicals with a target price of Rs 130 in its research report dated October 26, 2018.
We remain positive on the traction towards vertical integration and capacity expansion.
While both companies are key beneficiaries of environmental compliance and favourable supply-demand dynamics in their respective segments of dyes and colour industry, their focus on vertical integration and capacity expansion provides impetus to earnings growth.
Duties imposed on these commodities are important inputs for various streams like animal feed and plastic processing industries.
Bodal Chemicals’ dyes business appears well positioned to gain from higher volumes from the capacity expansion, strong pricing trend and the supply demand imbalance in China.
While environmental compliance and the resultant plant shutdowns in China is not a new development, situation appears to be more structural as news flow suggest Chinese manufacturers are looking for business collaboration in India to source dyestuff and dye intermediates.
The undemanding valuation beckons attention for long-term investors in this weak phase.
ICICI Direct is bullish on Bodal Chemicals has recommended buy rating on the stock with a target price of Rs 150 in its research report dated March 28, 2018.
Moneycontrol Research maintains the view that Bodal Chemicals is on an accelerated growth path for the next few years.
BP Equities is bullish on Bodal Chemicals has recommended buy rating on the stock with a target price of Rs 249 in its research report dated October 16, 2017.
We have collated a list of top 5 stocks on which brokerage initiates coverage in August. These stocks can give up to 28 percent in next 1 year from Thursday’s closing price.
Company is currently undergoing substantial capacity expansion and expect incremental revenue contribution from the new capacity from FY 2019.
Kunal Saraogi of Equityrush is of the view that one may buy Indraprastha Gas with a target of Rs 1140.
Vishvesh Chauhan of Monarch Networth Capital advises buying NCC with a target of Rs 107.
Bodal Chemicals is in the news on the back of their latest acquisition wherein they bought 70 percent equity in SPS Processors.