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Stock To Buy: Sharekhan Bullish On This Multibagger Mid Cap Sugar Stock, Target Price Rs 425
Leading brokerage Sharekhan has assigned buy call to Balrampur Chini Mills Ltd with a target price of Rs 425 apiece. The last trading price of Balrampur Chini Mills is Rs 376 apiece with an intraday gain of 1.84%. The company has a market capitalisation of Rs 7671 crore.
Balrampur Chini Mills Limited's (BCML) H1FY2023 performance was affected by lower cane crushing volumes, rise in SAP cost, and higher fixed costs, which affected profitability. If you buy the stock now, you will get a potential return of 13%. Check vital points below:
1. Balrampur Chini Mills Stock Outlook & Return
The last trading price of the stock is Rs 376 apiece. The 52-week high of the stock is Rs 525 apiece and 52-week low is Rs 299 apiece, respectively. The stock has given multibagger returns with 5-years return at 29%, 3-years return at 159%, and last 1-year return at 17%. The stock has jumped 13% in last 1-month and 7% in 1-week.
2. Good Outlook For Sugar Season 2022-2023
Despite unseasonal rains in October 2022, management has maintained a good outlook for the sugar season with production volumes expected to touch FY2020 levels, driven by a 7-8% increase in the area under cultivation, enhanced cane-development activities to reduce the risk of pest attacks, and increased mix of high-yield variety of sugar.
Higher domestic consumption and exports sales would help in registering better sales volume in H2FY2023 and would cover up the loss achieved in H1FY2023.
3. Balrampur Chini Mills Valuation
According to Sharekhan, "Strong growth in the distillery business will help BCML to consistently improve its profitability in the long run. We like the company's focus on improving its growth prospects by playing on its strategy of maximising value accruals from each tonne of cane crushed. With an expected improvement in cash flows, the company is focusing on becoming debtfree by FY2024/FY2025. Management has maintained its stance on improving shareholders' value by generating higher cash flows in the coming years. The stock trades at an attractive valuation of 13.9x/12.2x its FY2023E/FY2024E earnings. We maintain our Buy recommendation on the stock with a revised price target (PT) Rs. 425."
4. About Balrampur Chini Mills
BCML is one of the largest integrated sugar manufacturing companies in India. The allied businesses of the company comprise distillery operations and cogeneration of power.
The company is headquartered in Kolkata and has 10 sugar factories in UP with total cane crushing capacity of 77,500 tonne per day, four distillery units with a collective capacity of 560 kilo litre per day, and eight co-generation units with saleable co-generation capacity of 175.7 MW.
Disclaimer
The stock has been picked from the brokerage report of Sharekhan. 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.
