Recommendations From Consumer Goods & Cement Sector

Recommendations From Consumer Goods & Cement 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.

BLUE STAR LTD 

CMP -Rs 695.15
BSE CODE : 500067
Volume : 8,163
Face Value : Rs 2
Target : Rs 745
Stoploss Rs : 650 (CLS)


Blue Star offers end-to-end air conditioning and refrigeration solutions to its customers. The scrip was recommended based on its strong technical performance. On the consolidated financial front, net sales for Q2FY21 decreased by 27.8 per cent to Rs 902.12 crore as against Rs 1,249.47 crore reported for Q2FY20. Subsequently, operating profit also declined by 27.61 per cent to Rs 60.94 crore for Q2FY21 from Rs 84.18 for Q2FY20. The net profit decreased by 59.53 per cent from Rs 37.16 crore in Q2FY20 to Rs 15.04 crore in Q2FY21. Digitization and healthcare initiatives offer good prospects for the professional electronics and industrial systems segment. The company is focusing on efficiently managing its working capital and operating costs. Blue Star will gain from the launch of new products with virus deactivation technology (VDT) and the ban on the import of air-conditioners by the Directorate General of Foreign Trade (DGFT). Hence, BUY.

HEIDELBERG CEMENT INDIA LTD. 

CMP - Rs 206.30
BSE CODE : 500292
Volume : 73,611
Face Value : Rs 10
Target : Rs 225
Stoploss : Rs 190(CLS)


Heidelberg Cement with its core products being cement readymixed concrete aggregates and related activities is one of the leading producers of building materials. Looking at the quarterly trends, on a standalone basis, the net sales for Q2FY21 decreased by 1.31 per cent to Rs 512.69 crore from Rs 519.51 crore reported for Q2FY20. It reported an operating profit of Rs 136.08 crore for Q2FY21, thus expanding by 0.6 per cent compared to the operating profit of Rs 135.27 crore posted for Q2FY20. The company gained net profit of Rs 62.40 crore in Q2FY21, which is an expansion by 7.31 per cent compared to the net profit of Rs 58.15 crore gained in Q2FY20. The company’s capacity utilisation is higher than the industry average of 67 per cent. It has recorded the highest-ever profitability in FY20. There is also a reduction in the prices of input costs. Hence, BUY

(Closing price as of Nov. 17, 2020)

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