Buy Chemplast Sanmar, target price Rs 990: IIFL
Chemplast Sanmar, incorporated in the year 1985, is a Small Cap company (having a market cap of Rs 1187.55 Crore) operating in General sector.
By ETMarkets.com | Updated:
iStock
IIFL has buy call on Chemplast Sanmar with a target price of Rs 990. The current market price of Chemplast Sanmar is Rs 597.55. Time period given by analyst is year when Chemplast Sanmar price can reach defined target. Chemplast Sanmar, incorporated in the year 1985, is a Small Cap company (having a market cap of Rs 1187.55 Crore) operating in General sector.
Chemplast Sanmar Ltd. key Products/Revenue Segments include Sale of Products, Export Incentives, Scrap, Lease Rentals and Other Services for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-12-2021, the company has reported a Consolidated Total Income of Rs 1464.73 Crore, down 13.58% from last quarter; Total Income of Rs 1694.80 Crore and unchanged from last year same quarter. Company has reported net profit after tax of Rs 236.86 Crore in latest quarter.
Investment Rationale
PVC prices have again begun to rise in India, with 2-3 price hikes (aggregating to Rs9-10/kg) since Chemplast’s 3QFY22 earnings call on 31-Jan. Recovery in demand is now complemented by higher fuel costs worldwide, pointing to likely improved margins on PVC for Chemplast. Meanwhile, based on IIFL's industry checks, the custom manufacturing (CM) business appears to be growing considerably better than the brokerage expected, likely exceeding the company’s targeted 35% Cagr. This business could well turn out to be the surprise package for investors, potentially sparking a re-rating of the stock, the brokerage said.
Promoter/FII Holdings
Promoters held 54.99 per cent stake in the company as of 31-Dec-2021, while FIIs owned 9.89 per cent, DIIs 25.7 per cent.
Chemplast Sanmar Ltd. key Products/Revenue Segments include Sale of Products, Export Incentives, Scrap, Lease Rentals and Other Services for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-12-2021, the company has reported a Consolidated Total Income of Rs 1464.73 Crore, down 13.58% from last quarter; Total Income of Rs 1694.80 Crore and unchanged from last year same quarter. Company has reported net profit after tax of Rs 236.86 Crore in latest quarter.
Investment Rationale
PVC prices have again begun to rise in India, with 2-3 price hikes (aggregating to Rs9-10/kg) since Chemplast’s 3QFY22 earnings call on 31-Jan. Recovery in demand is now complemented by higher fuel costs worldwide, pointing to likely improved margins on PVC for Chemplast. Meanwhile, based on IIFL's industry checks, the custom manufacturing (CM) business appears to be growing considerably better than the brokerage expected, likely exceeding the company’s targeted 35% Cagr. This business could well turn out to be the surprise package for investors, potentially sparking a re-rating of the stock, the brokerage said.
Promoter/FII Holdings
Promoters held 54.99 per cent stake in the company as of 31-Dec-2021, while FIIs owned 9.89 per cent, DIIs 25.7 per cent.
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