Recommendation From Textiles & Oil Marketing & Distribution Sector
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.
RAYMOND LTD
CMP - Rs 862
BSE CODE 500330
Volume 29419
Face Value Rs 10
Target Rs 950
Stoploss Rs 790 (CLS)
Raymond is a leading player offering end-to-end solutions for fabrics and garmenting. The company's net revenue was up 16 per cent YoY reaching Rs 1,876 crore in Q2FY19 with growth across all segments. EBITDA stood at Rs 214 crore in Q2FY19, up 35 per cent YoY. Net profit rose to Rs 63 crore, up 5 per cent YoY. Net worth soared to Rs 1,912 crore in Q2FY19 as against Rs 1,799 in Q2FY18. Net debt rose to Rs 2,280 crore in Q2FY19 from Rs 2,018 crore in Q2FY18, due to manufacturing capex in Ethiopia and Amravati plant and rise in working capital. Raymond reported a blended sales growth of 3 per cent across its retail formats. The overall business surged 15 per cent. Higher net working capital resulted in negative cash flow from operations of Rs 30 crore in Q2FY19. EPS surged to Rs 21.93 in FY18 from Rs 4.16 in FY17. Thus, we recommend investors to BUY this stock.
PETRONET LNG LTD.
CMP - Rs 223
BSE CODE 532522
Volume 67556
Face Value Rs 10
Target Rs 245
Stoploss Rs 203 (CLS)
Petronet LNG operates in the energy sector and has set up India’s first LNG receiving and regasification terminal in Gujarat and another in Kerala. Its revenue from operations surged 38.28 per cent to Rs 10,745.34 in Q2FY19. The company reported highest ever PAT of Rs 1,150 crore in Q2FY19. EPS dropped to Rs 3.75 in Q2FY19 from Rs 3.93 in Q2FY18. Operating profit margin fell to 8.22 per cent in Q2FY19. Net worth surged 16 per cent to Rs 10,056.64 crore in Q2FY19. It has a dividend yield of 1.95 per cent. ROA, ROE and ROCE stand at 12.27 per cent, 23.10 per cent and 29.71 per cent, respectively. Enterprise value is Rs 35,285.53 crore. Adjusted P/E and EV/ EBITDA multiples are 16.44x and 9.72x, respectively. Total D/E ratio is 0.15x. The stock has risen since last 5 days, gaining by 9.52 per cent. Thus, we recommend investors to BUY this stock.