Recommendations From Consumer Textiles- Weaving & Ceramics- Granite 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.
WELSPUN ENTERPRISES LIMITED
CMP - Rs 78.50
BSE CODE - 532553
Volume- 1,10,105
Face Value- Rs 10
Target- Rs 87.50
Stoploss -Rs 71.00 (CLS)
Welspun Enterprises is engaged in civil engineering services. The company’s segments include infrastructure, trading, oil and gas exploration activities and corporate support to various infrastructure SPV's. On a consolidated basis, for Q1FY21 the company reported net sales of Rs 190.04 crore, decreasing by 63.65 per cent from Rs 522.77 crore reported for Q1FY20. For Q1FY21, the company gained operating profit of Rs 51.08 crore, a contraction by 28.68 per cent compared to the operating profit of Rs 71.62 crore gained in Q1FY20. Welspun Enterprises gained net profit of Rs 20.72 crore in Q1FY21, declining by 26.5 per cent compared to Rs 28.19 crore gained in Q1FY20. The company is focusing on cost optimisation and eliminating unnecessary costs. For FY21 the company has an order book of Rs 48.6 billion and is dedicated to completing this project ahead of its schedule. Under the government’s new national infrastructure policy, WEL is hopeful of getting new orders. Hence, BUY.
KAJARIA CERAMICS LIMITED
CMP - Rs 574.65
BSE CODE - 500233
Volume - 85,919
Face Value - Rs 1
Target - Rs 620
Stoploss - Rs 535(CLS)
Kajaria Ceramics is the manufacturer of ceramic and vitrified tiles in India. It has an annual aggregate capacity of 73 million sq. metres. The company offers more than 2,800 options in ceramic wall and floor tiles, vitrified tiles and designer tiles. For Q2FY21 on a consolidated basis, the company reported net sales of Rs 712.51 crore, decreasing by 0.3 per cent from Rs 714.68 crore reported for Q2FY20. Its PBDT expanded by 37.06 per cent to Rs 146.42 crore in Q2FY21 as compared to Rs 106.83 crore posted in Q2FY20. Kajaria Ceramics gained net profit of Rs 89.66 crore in Q2FY21, declining by 3.66 per cent compared to Rs 93.07 crore gained in Q1FY20. The company is focusing on expanding its presence in smaller towns by increasing its dealer network, developing exclusive showrooms and launching new products in existing and new sizes. The export demand is expected to improve in the coming future. Hence, BUY.
(Closing price as of Oct. 20, 2020)