The stock of shrimp producer, processor and exporter, Apex Frozen Food has a price target of Rs 340 from broking firm Geojit, implying an upside potential of nearly 34 per cent from current levels.
"We maintain Buy rating with a revised Target of Rs.340, due to better than expected volumes and attractive valuation. Q1FY21 revenue de-grew by 1.6%YoY. Better realization and rupee depreciation offset the impact of 11.4%YoY decline in volumes. EBITDA grew by 51.6%YoY mainly aided by 620bps increase in gross margin due to better realisation and reduction in raw material cost," Geojit has said in its latest report.
Apex has recently got all the required approvals for its newly added capacity of 20,000MT and ramp up in utilization will aid future growth.
"We increase our volume assumptions to factor gradual improvement in industry supply-chain while appreciation in the Indian rupee will impact realisation. Expect revenue/PAT to grow at 15%/28% CAGR over FY20E-FY22E. Currently the stock trades at 13x 1Yr Fwd P/E (2Yr Avg=16x). We value the stock at 12X FY22E EPS, considering the current uncertain situation," the broking firm has stated.
The stock of Apex Frozen was last trading at Rs 272 on the National Stock Exchange.