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'Buy' This Stock For +40% Upside, In 1 Year: Sharekhan Recommends
Brokerage firm Sharekhan has recommended investors to buy Mayur Uniquoters Ltd's stocks with a potential upside of +40%, within a target period of 1 year.
Target Price
The Current Market Price (CMP) of Mayur Uniquoters Ltd. is Rs. 477. The brokerage firm, Sharekhan has estimated a Target Price for the stock at Rs. 670. Hence the stock is expected to give a +40% return, in a Target Period of 1 year.
| Stock Outlook | |
|---|---|
| Current Market Price (CMP) | Rs. 477 |
| Target Price | Rs. 670 |
| 1 year return | 40.00% |
Company performance
Mayur Uniquoters Ltd's Q2FY22 results have beaten expectations, led by higher sales, price hikes, and operating leverage benefits, partially mitigated by increased raw material prices. Net revenues increased by 55.9% YoY and 65.9% QoQ to Rs. 196 crore, led by a strong recovery in sales in both domestic and export markets. EBITDA margin improved 570 bps QoQ to 20.6% in Q2FY22. EBITDA and PAT increased by 60.7% YoY and 47.9% YoY to Rs. 60.7 crore and Rs. 47.9 crore respectively in Q2FY22.
Comments by Sharekhan
According to Sharekhan, "We maintain a Buy on Mayur Uniquoters Limited (MUL) with an unchanged PT of Rs. 670, owing to positive business outlook and margin expansion." However, the brokerage firm mentioned, "Stock is trading below its historical average multiples at P/E multiple of 14.2x and EV/EBITDA multiple of 8.6x its FY2023 estimates."
About the company
MUL is the largest manufacturer of artificial leather/PVC vinyl, using the 'Release Paper Transfer Coating Technology' in India. The company has six manufacturing plants with a capacity of 3.1 million meters per month. The automotive segment is the largest contributor (57% of revenue), while the footwear segment contributes 35% to sales. MUL follows the OEM-based model with OEM contributing 75% to revenue. The domestic segment contributes about 80% to revenue, while the rest is contributed by exports
Disclaimer
The above stock was picked from the brokerage report of Sharekhan. 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.
(Also read: HDFC Securities Recommends To 'Buy' This Cement Stock For 15% Returns In 1 Year)
