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Buy This Multibagger Midcap Stock As Shares Can Jump 15% In 12 Months: ICICI Direct
ICICI Direct has placed a "buy" call on Solar Industries (SIL) in its report published on November 6, 2022, with a target price of Rs 125 per share. The brokerage sees a 15% potential upside in the share price from its current level if the shares are purchased at the current market price. SIL is the largest manufacturer of industrial explosives and explosive-initiating systems in India. It has a capacity of ~330,000 MT/year. It holds a reasonable market share in India of ~30%. It also leads the exports share from India, which is around 70% in industrial explosive and initiating system. It exports to 55 countries in the world and has recently expanded its manufacturing base to many African countries.
Stock Outlook & Returns on investment
On NSE, the shares of Sil today last traded at Rs 4,087.90 per share, 1.98% up from the previous close. The stock today hits its fresh 52-week at Rs 4200 in early trade. The 52-week low level of the stock is Rs 2,163.55 recorded on 12 January 2022. With a market cap of Rs 36,991.43 crore, this is a mid-cap stock.
The stock in the past 1 week has gained 4.77%, however, in a month, it declined by 1.24%. It had given 30.07% positive returns in 3 months. In 1 year, the stock has given 75.87% positive returns. In 3 and 5 years, teh stock has given multibagger returns of 285.81% and 286.64%, respectively.
Q2FY23 Results
Solar Industries (SIL) is the largest manufacturer of industrial explosives and explosive initiating systems in India. It has a capacity of ~330,000 MT/year. It holds reasonable market share in India of ~30%. It also leads the exports share from India, which is around 70% in industrial explosive and initiating system. It exports to 55 countries in the world and has recently expanded its manufacturing base to many African countries.
ICICI Direct Suggests Buy SIL for target price of Rs 4700 per share
SIL is expected to perform well, going forward, on the back of strong demand from coal and infra sector along with its foreign subsidiaries. "We maintain our BUY rating on the stock Target Price and Valuation: We roll over our numbers to FY25E and value the stock at Rs 4700, valuing the business at 37x FY25E earnings," the brokerage has said.
Key triggers for future price performance
Better performance from overseas subsidiaries on the back of strong demand, Revenue increase from non-CIL customers in coal segment. Defence and export segments picking up due to diversified portfolio.
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 making any investment decision.
