Recommendation from Breweries & Graphite
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 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.
GLOBUS SPIRITS LTD.
BSE CODE 533104
Volume 34,467
Face Value ₹ 10
Target ₹ 1,670
Stoploss ₹ 1,370 (CLS)
Globus Spirits Ltd. was incorpo-rated in 1993-94, erstwhile named Globus Agronics Limited. The company caters to four important segments of the alcohol industry – Indian Made Indian Liquor (IMIL), Indian Made Foreign Liquor (IMFL), IMFL bottling and bulk alcohol. Focusing on the quarterly performance of the company, it recorded net sales of ₹ 545.02 crore, a 26.01 per cent jump in Q3FY22 from ₹ 432.51 crore in Q3FY21. The operating profit in Q3FY22 stood at ₹ 60.52 crore as compared to ₹ 68.41 crore in Q3FY21. Net profit witnessed a decrease of 20.08 per cent in Q3FY22 to ₹ 30.50 crore as compared to ₹ 38.16 crore in Q3FY21.With doubling of the current capacity by FY24 to about 1,230 KLPD, GSL plans to capitalise on the changing dynamics in the liquor space. The company’s net debt is expected to come down with return ratios reaching levels of 30+ per cent. Hence, we recommend BUY.
GRAPHITE INDIA LTD.
CMP - ₹ 515.55
BSE CODE 509488
Volume 2,80,084
Face Value ₹ 2
Target ₹ 554
Stoploss ₹ 470 (CLS)
Graphite India (GIL) is the largest Indian producer of graphite electrodes by total capacity. Its manufacturing capacity of 98,000 tonnes per annum is spread over three plants at Durgapur and Nashik in India and Nuremberg in Germany. GIL has over 40 years of technical expertise in the industry. The company is a pioneer in India for manufacture of graphite electrodes as well as carbon and graphite speciality products. Analysing the quarterly performance, net sales for Q3FY22 stood at ₹ 835 crore as opposed to ₹ 453 crore in Q3FY21, a phenomenal increase of 84.33 per cent. The operating profit climbed to ₹ 218 crore in Q3FY22, up by 62.69 per cent as compared to ₹ 134 crore in Q3FY21. Net profit soared up by 66.67 per cent in Q3FY22 to ₹ 155 crore from Q3FY21 which was ₹ 93 crore. Steel demand in India is increasing in tune with the pick-up in demand from the infrastructure and construction sector. With the improved demand scenario, an uptick was witnessed with increase in prices of graphite electrodes. This looks promising for the company. Hence, we recommend BUY.
(Closing price as of Mar 22, 2022)