After Rising 19% In 1-Year, This Small Cap Multibagger Stock Can Jump 21%, Buy: ICICI Direct

ICICI Direct has assigned buy rating to small cap multibagger stock, Ador Welding Ltd (AWL) with a target price of Rs 1015 apiece. Buy Ador Welding today at the current market price of Rs 839 apiece and a potential return of 21%. AWL reported decent Q2FY23 results. Revenues came in at Rs 184.9 crore, up 15.9% YoY, 17.1% QoQ.

EBITDA came in at Rs 15.2 crore up 16.3% YoY, aided by reduced losses in flares & process equipment business. Check key takeaways below:

1. Ador Welding Ltd Stock Outlook & Return

The current market price of Ador Welding is Rs 839 apiece with an intraday decline of 3%. The company has a market capitalisation of Rs 1141 crore. The stock has given a return of 59% in 5-years, 166% in 3-years, and 19% in 1-year.

2. Ador Welding Ltd Key Triggers For Future Price Performance

AWL aims to focus on core welding business, reduce legacy costs while streamlining projects business to regain growth and improve profitability.

Domestic welding & automation business to focus on improving margins and realisations with cost rationalisation, enhance advanced product portfolio, improving strike ratio of order wins and optimised product mix.

3. Ador Welding Valuation

According to ICICI Direct, "Going forward, better consumables volumes, rebound in equipment sales and projects business turnaround to drive growth, profitability. Considering strong growth outlook, margin revival, we maintain BUY rating. We value AWL at Rs 1015 i.e. 21x P/E on FY24E EPS."

4. Ador Welding About

Ador Welding (AWL) is a leading player in the welding consumables (~19% market share), welding equipment, automation and projects business. Welding consumables contributed ~81% of revenue in FY22.

AWL is expected to continue strong RoCE, positive free cash flow trajectory in consumables in comings years despite a challenging environment. It aims to reduce legacy costs in projects business to improve return ratios.

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.