Fundamentals

GUJARAT ALKALIES AND CHEMICALS

Ticker: 530001 BUY: Rs.612.90 Target: Rs.692

GACL is one of the leading producers of caustic soda in India. It has formed a joint venture with NALCO for setting up a new 800 TPD caustic soda plant integrated with a 130 MW coal based power plant at Dahej. It has initiated many projects which include increasing the production capacity for chloromethanes plant from 110 TPD to 170 TPD at Vadodara, which became operational in March 2018. It is expanding hydrogen peroxide capacity by putting another new 14,000 TPA plant at Dahej and a 32,000 TPA poly aluminium chloride plant at Vadodara. A new 1,05,000 TPA chloromethanes plant & 33,870 TPA phosphoric acid plant at Dahej are under different stages of implementation. These products have applications across various industries. It plans to generate revenue of Rs 5,000 crore by 2022. Thus, we recommend it as a BUY.



BATA INDIA

Ticker: 500043 BUY: Rs.979.90 Target: Rs.1105

Bata India is a manufacturer and retailer of footwear. In FY18, the company added 100 Coco stores and 30 franchise stores, taking the total store count to 1375 outlets. For FY19, it plans to add 150 new stores and expand into Tier-II and Tier-III cities going forward. In Q1FY19, its revenue was up by 8 per cent YoY due to high volumes of new product launches. The EBITDA and PAT grew by 38 per cent and 36.8 per cent, respectively, due to high revenue and operational efficiency. It is also focusing on branding and has increased its advertisement expenses. The reduction in GST rate on footwear had a positive impact on the company. The recent hike in import duty on footwear from 20 per cent to 25 per cent would benefit companies like Bata. Hence, we recommend it as a BUY.