Recommendation From Sugar & Diversified Sector

Recommendation From Sugar & Diversified 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.

DCM SHRIRAM LIMITED

CMP - Rs 324.15

BSE CODE : 523367
Volume : 11,270
Face Value : Rs 2
Target : Rs 353
Stoploss : Rs 300 (CLS)

DCM Shriram Limited is engaged in the business of fertilizer, sugar and caustic soda. On the consolidated financial front, for Q4FY20, net sales decreased by 0.91 per cent to Rs 1,862.99 crore from Rs 1,880.17 crore reported in Q4FY19. Volumes were impacted nationwide due to the lockdown restrictions. The PBDT also contracted by 25.84 per cent for Q4FY20 to be Rs 307.93 crore as compared to Rs 415.21 crore for Q4FY19. Subsequently, the net profit gained by the company for Q4FY20 declined by 29.01 per cent to Rs 207.38 crore as against Rs 292.14 crore gained in Q4FY19. During Q4FY20, the company successfully commissioned the 66 MW power plant at Kota which will further help in reducing costs and improving the reliability of operations. With the strengthening of its product and geographic portfolio, the company’s management remains positive of sustained growth over the medium term. Considering that the company has stable cash flow and adequate cash in hand to withstand the current subdued economic conditions and drive growth in the future, we recommend a BUY.

E.I.D - PARRY (INDIA) LIMITED 

CMP - Rs 280.90

BSE CODE : 500125
Volume : 73,249
Face Value : Rs 1
Target : Rs 305
Stoploss : Rs 260 (CLS)

E.I.D - Parry (India) Limited is a diversified manufacturer of fertilizers, pesticides, sugar, ceramics, electronics and seeds. The company is also diversifying into the manufacture of organic fertilizers, bio-pesticides, acetic acid, wall tiles and horticultural activities. On the quarterly consolidated front, net sales were reported at Rs 4,245.09 crore in Q4FY20, up by 16.42 per cent from Rs 3,646.21 crore in Q4FY19. Despite the effects of the lockdown in the country, the company reported an operating profit of Rs 640.45 crore in Q4FY20, increasing by 30.73 per cent Rs 489.91 crore in Q4FY19. In the quarter ended March 2020, the company reported a net profit of Rs 251.57 crore from Rs 201.32 crore reported in the same quarter for the previous fiscal year, showcasing a growth rate of 24.96 per cent. With a growing shift towards natural and organic products, the company has positioned itself well in the field of human health and wellness. We thus recommend a BUY.
(Closing price as of July 14, 2020)

Rate this article:
No rating
Comments are only visible to subscribers.

DALAL STREET INVESTMENT JOURNAL - DEMOCRATIZING WEALTH CREATION

Principal Officer: Mr. Shashikant Singh,
Email: principalofficer@dsij.in
Tel: (+91)-20-66663800

Compliance Officer: Mr. Rajesh Padode
Email: complianceofficer@dsij.in
Tel: (+91)-20-66663800

Grievance Officer: Mr. Rajesh Padode
Email: service@dsij.in
Tel: (+91)-20-66663800

Corresponding SEBI regional/local office address- SEBI Bhavan BKC, Plot No.C4-A, 'G' Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400051, Maharashtra.
Tel: +91-22-26449000 / 40459000 | Fax : +91-22-26449019-22 / 40459019-22 | E-mail : sebi@sebi.gov.in | Toll Free Investor Helpline: 1800 22 7575 | SEBI SCORES | SMARTODR