Pondy Oxide (532626)(Share Price - Rs.574): Can be considered
Valuation: Undervalued stock as compared to close peers with trailing PE of 9.76x.
Reason to Consider: Pondy Oxide is one of the top players in the battery industry. The company is India's leading producer of lead having a presence in lead alloys and PVC additives which are supplied to the battery, chemical and PVC manufacturers. Owing to the business background, it has grown at CAGR of 20% in last five years.
Drivers: Lead prices are trading closer to $ 2609/tonne which increase by 31% YoY. It would benefit coming in coming quarter. It has acquired land at Kancheepuram District for constructing a facility of manufacturing zinc metal (capacity- 9000 MT/annum), zinc oxide (capacity- 3600MT/annum).
Financial: In Q3FY18, the company posted a good set of numbers with PAT of Rs.8.04 crore against Rs.7.05 crore QoQ and Rs.6.97 crore YoY. EPS stood at Rs.14.42/ share and Rs.36.69/ share in 9MFY18.
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