Buy This Appliances Stock For +16% Return, In 6 Months: HDFC Securities Recommends

Target Price

The Current Market Price (CMP) of Butterfly Gandhimathi Appliances Ltd. is Rs. 874.85. The brokerage firm, HDFC Securities has estimated a Target Price for the stock at Rs. 1016. Hence the stock is expected to give a 16.13% return, in a Target Period of 6 months.

Company performance

Butterfly Gandhimathi Appliances Ltd. (BGAL) reported the highest quarterly revenue and profitability in Q2FY22 with revenue at Rs. 403.1 crore, +39.6%/179.2% YoY/QoQ. Kitchen appliances and Cooker/Cookware both saw a robust increase in revenue, up 39.1% and 62.7% YoY respectively. On the back of such strong topline numbers, the company revised its revenue growth guidance for FY22 from ~10-15% to ~20-25%. The company reported an EBITDA of Rs. 46.5 crore (up 35.7% YoY).

Comments by HDFC Securities

According to HDFC Securities, "BGAL has a strong foothold in the Southern market and an extensive distribution comprising 500+ exclusive distributors catering 25,000+ retail points across India. We expect it to maintain a RoCE of 30%+ in FY24E. We expect revenue and earnings to grow at CAGR of 17.7% and 34.4%, respectively, over FY21-24E."

About the company

Butterfly Gandhimathi Appliances Limited (BGAL) is a leading manufacturer of Kitchen and Electrical Appliances, and it will be one of the biggest beneficiaries of the continued growth in the domestic kitchenware segment. The strong historical patronage of the "Butterfly" brand, continuous innovations, and premium quality products will support revenue growth.

Disclaimer

The above stock was picked from the brokerage report of HDFC Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.