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Stock To Buy: Anand Rathi Top Pick Is This Agro Chemicals Stock, 27% Return Expected
Anand Rathi has recommended investors to buy the shares of Heranba Industries Ltd with a target price of Rs 650 apiece. The current market price of stock is Rs 511 apiece. If you buy shares of Heranba Industries today, you will get 27% return. The small cap company has a market capitalisation of Rs 2046 crore. Check key takeaways below:
1. Heranba Industries Ltd Stock Outlook
The current market price of Heranba Industries Ltd is Rs 511 apiece with intraday gain of 0.78%. The stock's 52-week high is Rs 744 apiece and 52-week low is Rs 496 apiece, respectively.
2. Heranba Industries Ltd Financial Performance
The company reported good set of numbers for the quarter under review with revenue growth of 19.8% year-on-year to ₹4,233 million on standalone driven by strong performance in domestic market navigating uneven monsoon distribution.
The management expects domestic agrochemical industry to do well in H2 FY23 due to residual moisture owning to late withdrawal of the southwest monsoon, higher reservoir levels and a rise in MSP (Minimum selling price) of Rabi crops for the upcoming 2023-24 marketing season.
On profitability front, the EBITDA from operations for the quarter increased by 8.4% year-on-year at ₹664 million with an operating margin of 15.3%.
The company achieved the reported PAT of ₹477 million, an increase of 4.5% year-on-year with a net margin of 11.2% translating into EPS of ₹11.92 per share for the quarter.
3. Heranba Industries Ltd Valuation
According to Anand Rathi, "We are positive on Heranba Industries Ltd, the company has diverse product range, strong margins, strong balance sheet, capacity expansion and further opportunities from off patent products in highly regulated markets. We maintain BUY rating on the stock with a revised target price of ₹650 per share."
4. About Heranba Industries
The company is a crop protection chemical manufacturer, exporter and marketing company based out of Vapi, Gujarat, with Corporate and Administration Offices in Mumbai. It manufactures Intermediates, Technicals and Formulations & is one of the leading domestic producers of synthetic pyrethroids.
Its Pesticides range includes insecticides, herbicides, fungicides and public health products for pest control. The company's business mix include: Domestic Institutional sales of Technicals (37%), Technicals Exports (25%), Domestic Formulations (31%) and Formulations Exports (7%).
Disclaimer
The stock has been picked from the brokerage report of Anand Rathi. 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.
