RECOMMENDATIONS

The company is engaged in manufacturing of paints, var­nishes, enamels or lacquers, organic and inorganic com­pounds. The company commands 11.1 per cent market share in terms of revenue and is the fourth largest player in the paints industry in India. Its PAT has grown at a CAGR of 31.5 per cent over FY15-17. It has delivered ROE of 20.9 per cent on a TTM basis. The demand for decorative paints is increasing as the tier-II and tier-III cities are developing due to government initiatives, which will help the company to grow aggressively going forward. It has pan-India presence with focus on regions in eastern and northern India with a strong distribution network. It is planning to expand its market share in southern and western regions of India. Thus, we recommend our readers to BUY the scrip.

The company is engaged in textile manufacturing and sugar production. Its textile operations include spinning, weaving and processing. It has a major market share in Ludhiana (North India). Cotton is the basic raw material required by the company. Good monsoon in 2017 has led to ample production of cotton and stabilized the prices. Going forward, the margins of the company are expected to improve. Similarly, good sugarcane production is expected in FY18. Although H1FY18 has been weak, management is optimistic about decent growth in H2FY18 led by favourable climatic conditions. The stock is trading at TTM P/E of 6.7x with TTM EPS of Rs. 17.3 which is attractive as against its peers. Considering these factors, we recommend our readers to BUY the scrip.