Good Stocks to buy 2017 (recommendations by Avinnash Gorakssakar

Here we discuss about stocks and we should buy them or not.
Post Reply
User avatar
Captain Sangeeta
Posts: 6
Joined: Mon Feb 06, 2017 4:12 pm

Good Stocks to buy 2017 (recommendations by Avinnash Gorakssakar

Post by Captain Sangeeta »

Avinnash Gorakssakar of Joindre Capital has recommended two mid-cap stocks to buy for 2017:

Finolex Industries

The company reported extremely strong numbers for last year that is FY16 on a topline of Rs 2400 crore, the company reported a EBITDA of close to about Rs 270 crore and a profit of close to about Rs 180-185 crore. The traction in FY17 for the first nine months has continued. In fact, we have seen 20% growth in the first nine months and despite the fact that Q3 was a slightly challenging quarter due to the demonetisation impact, margins have actually improved to roughly about 19% and EBITDA in absolute terms has gone up by almost 30% with the profit after tax moving by 43% largely because the percentage of value added products has increased.

The management is very hopeful that coming FY18 we could see volume growth of almost 15% which is the kind of long term average for PVC growth in the PVC piping business. Most importantly, the kind of initiatives the government has announced in the budget especially for affordable housing, for irrigation, opens a big opportunity for a company like Finolex Industries.

In fact, recently Finolex Industries has tied up with Lubrizol India for PVC pipes which is another big opportunity. The management expects that this business will actually grow faster than its traditional agri business. We expect that in terms of earnings, the next year earnings could be about Rs 27-Rs 28 and valuations for Finolex Industries could actually move up to more than 19-20 times. In terms of balance sheet the company is virtually debt free, the company has a return on equity of almost 25% and we believe that this could definitely rerate the stock going forward. Over the next 12-15 months we have a target price of Rs 622 here.

Shree Pushkar Chemicals & Fertilisers Limited

Shree Pushkar Chemicals & Fertilisers Limited started its business in 1993 and they initially started with dye stuff intermediaries, then they gradually forward integrated into reactive dyes which is used lively in the textile business. They have now moved into the cattle feed business and have also entered the SSP fertiliser business.

In fact, all the businesses have been doing pretty well over the last two or three years. In fact, last year the company reported a top line of close to Rs 250 crore, EBITDA of Rs 35 crore and a bottom line of Rs 23 crore. This year has been remarkably good, that is, FY17. For the first nine months top line is up by almost 35%.
EBITDA is up by almost 70% and the bottom line is up by about 20-22% at Rs 22 crore so what they earned last year they have earned in the first nine months. The management has guided for a very strong growth trajectory for the next one year, expansion plans plus the kind of earnings expansion we believe could propel the earnings growth by almost 40-50% over the next 12 to 15 months.

We expect an earnings of roughly about Rs 11 for FY17 and close to about Rs 17-18 for FY18. In fact, we believe that valuations look extremely attractive around nine times FY18 and hopefully if the trajectory continues in FY19, this stock could definitely show a very strong growth forward also. We have a target price of close to about Rs 240 over the next 12 to 15 months.

http://economictimes.indiatimes.com/mar ... 410551.cms
Aviation is my first love. Stocks are my second love. My father is a famous investor. I am still learning the ropes :)
Post Reply