ICICI Direct Bullish On Midcap Capital Goods Stock, Likely To Gain 26%, Jumps 310% In 3 Yrs

ICICI Direct has assigned a buy on Grindwell Norton Ltd. with a target price of Rs. 2,490/share. According to the given target price, if you buy the stock at the current market price of Rs. 1,976.65/share, it can fetch up to 26% return in 12-18 months. Grindwell Norton is a Capital Goods sector midcap stock having a market capitalisation of Rs. 21,885.47 crore.

Q4FY23 Results

According to ICICI Direct, GNL reported a decent set of Q4FY23 numbers. Revenues came in at Rs. 664,8 crore, 19% YoY, primarily aided by a strong performance in the ceramics & plastic segment. EBITDA came in at Rs. 129.3 crore, up 4.6% YoY with margins at 19.4% while gross margins contracted 300 bps to 55% YoY. Consequently, PAT grew 9.8% YoY to Rs. 98.5 crore.

Buy for a target price of Rs. 2,490/share

According to the ICICI Direct, Going forward, accelerated growth in performance plastics & ceramics and exports is expected to drive long term incremental growth. "We remain long term positive and maintain our BUY rating on the stock. We value GNL at Rs. 2490 i.e. 50x P/E on FY25E EPS," the brokerage has said.

Stock Outlook

The last traded share price of GNL is Rs. 1,976.65/share, down 0.68% from its previous close. The stock traded its 52 week high on 9 September 2022 at Rs. 2,328.35/share and 52 week low on 20 June 2022 at Rs. 1,451/share, respectively.

It has given 4.51% positive return in 1 week, and 2.14% in 1 month, respectively. It has given 19.77% positive return in 1 year. In 3 years, it has given 309.54% positive return. In 5 years, it has given 283.15% positive return.

About - Grindwell Norton Ltd.

Grindwell Norton (GNL) is the market leader in the India abrasive market with ~27% market share. The segments include abrasives (contributing ~50.2%), ceramics & plastics (41.6%) and IT services & others (9.1%). GNL has witnessed strong and positive free cash flows consistently over more than a decade irrespective of the macro environment. It has consistently operated with high (>16%) margins and 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 consult with certified experts before making any investment decision.