Recommendation From Pharmaceuticals & Iron & Steel/Interm Sectors
The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.
KOPRAN
CMP - Rs77.25
BSE CODE 524280
Volume 236199
Face Value Rs10
Target Rs85.50
Stoploss Rs70
The company is an integrated maker of active pharmaceutical ingredients (APIs) and finished dosages with 75% of the consolidated revenue coming from exports. To sustain the growing competition the company has developed new products in both the categories, focusing mainly on the US and UK markets. Further, Kopran is one of the global peers in the maker of ampicillin trihydrate used as penicillin antibiotic that fights bacteria, which has a huge market across the globe going forward. Financially, Kopran is very well-placed. Considering the latest annual and quarterly data, the company has posted a justifiable revenue growth and robust PAT growth. The growth in its QoQ revenue and PAT came in at 42% and 335% respectively. Its FY17 revenue and PAT posted a growth of 4.5% and 131%, respectively amid higher operating profits and other income. Its P/E of 13.5x suggests that the stock is available at reasonable valuation
JINDAL STAINLESS (JSL)
CMP - Rs114.
BSE CODE 53250
Volume 151142
Face Value Rs2
Target Rs128
Stoploss Rs 104
The company promoted majorly by the Jindal Stainless Steel, Hisar, n which SBI and PNB hold 5.18 and 1.93% stakes, respectively. It is engaged in the manufacture of stainless steel, reaching 90% of its capacity utilisation to 7.3 lakh tonnes in FY17. Apart from steel melting shop, plate finishing, ferro ally, and HAPL in CRM posted growth of 42%, 33% and 11%, respectively, in FY17. Moreover, relatively lower freight, power and packaging costs led to cost optimisation which helped revival in the bottomline. Thereby, the company posted a revenue growth of 29.8% and net profit of Rs81.57 crore as against the loss of Rs556.79 crore. With this, the company has posted a net profit for the first time in FY17. During FY18, the company got approval to invest Rs704 crore for downstream stainless steel park in Kalinganagar with potential to create 4,800 jobs. On the industry front, the ministry has sought removal of import duty on coking coal, ferro nickel and stainless steel scrap, which are the basic raw materials. After removal of customs duty on some, this action would definitely help the company in the long run