Buy Small Cap Consumer Discretionary Stock, Target Price Rs 700/Share: ICICI Direct

ICICI Direct in its recent report has placed a Buy rating on Mayur Uniquoters (MUL) for a target price of Rs 700/share on the stock for gains up to 26% from its current market price in 12 months. MUL is a leading player in the technical textile domain, manufacturing synthetic leather (PVC, PU) for automotive, footwear & apparels etc.

Automotive segment constituted bulk i.e., ~50-60% of sales while footwear segment constituted ~20-30% of sales with rest being constituted by others. As of FY23, it clocked Rs 776 crore as consolidated sales with EBITDA & EBITDA margins placed at Rs 139 crore, 17.9% and PAT at Rs 104.2 crore. In auto space, Mayur is among very few companies having capabilities and approvals to supply their produce to global luxury car players such as Mercedes, BMW, etc.

Buy For a TP of Rs 700/Share

Commenting on the Buy rating, the brokerage has said, "We assign BUY rating on Mayur Uniquoters amidst healthy growth prospects especially in auto OEM export space, healthy margin profile (~20%), capital efficient business model (RoIC: 20%+) & Cash positive B/S (Net cash at ~Rs 180 crore as of FY23). We value Mayur Uniquoters at Rs 700 i.e., 20x PE on FY25E EPS of Rs 35/share. We also drive comfort from consistent positive CFO generation at MUL with present CFO yield at ~4% and Technology risk immune product profile (No EV risk). This is our conviction idea in small cap auto ancillary space."

Stock Outlook

The shares of MUL on Thursday traded at Rs 557.40 apiece, up 3.76% from its previous close of Rs 537.20 apiece. The stock opened at Rs 546.90 apiece on the BSE, and at the time of writing, it touched the day's high of Rs 568.70 and the day's low of Rs 545.

The stock has gained 9.02% in 1 week. Meanwhile, it gained 1.34% in 1 month and 28.65% in 6 months. It gained 15.31% in 1 year, 109.15% in 3 years, and 55.52% in 5 years, respectively.

Its 52-week high is Rs 583.60 apiece and 52-week low is Rs 382.40 apiece on the BSE. With a market cap of Rs 2,449.92 Crore, it is a small-cap Consumer Discretionary sector stock.

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 consult with certified experts before making any investment decision.