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This Small Cap Scrip Is Given A ‘Buy' For 18% Gains In 12 Months By ICICI Direct
ICICI Direct in its research reported released on November 11, 2021 has provided a 'Buy' rating on the stock of Nirlon for gains to the tune of over 18 percent as the company has set a target price of Rs. 455 per share. The buy on the scrip is suggested for the time period of 12 months.
About the company stock:
Nirlon Ltd (Nirlon) is in the business of development and management of commercial/IT-ITeS real estate. It owns two primary assets: Nirlon Knowledge Park (NKP), Mumbai and also 75% of undivided interest in Nirlon House, Worli. GIC Singapore is a co-promoter through its affiliate, Reco Berry Pvt Ltd . (Reco) of Singapore, and currently has a 63.92% holding.
Q2FY22 Result of Nirlon:
The company reported muted performance. Sales at the firm was down marginally YoY at Rs. 79.4 crore. The occupancy reduced YoY mainly due to one large licensee moving out post expiry of their license, a part of which has been released. EBITDA also rose over 17 percent sequentially and PAT also registered a growth to Rs. 33.8 crore during the period under review.
Target Price and Valuation: We value Nirlon at Rs 455/share, says the brokerage house.
Key triggers for future price performance:
• Quality Grade-A office assets and backing of Reco Berry - an affiliate of GIC.
• We expect its lease revenues to grow at 34% CAGR to | 496 crore in FY21-23E, led by incremental leasing revenues flow through from phase V.
• Clarity over future growth plans as and when the company shares it, will drive further value potential.
Alternate Stock Idea:
Besides Nirlon, the brokerage is bullish on Mahindra Life in the realty sector. This can be a play on expanding residential real estate portfolio. ICICI Direct has suggested a target price of Rs. 335 for the scrip.
Disclaimer:
The above stock is picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.
