Share to buy today: Buy this stock for 48% returns, say experts

The BSE Sensex gained around 196 points yesterday on positive Chinese date but the rupee continued its slide which is a major cause of concern for the Indian market investors. Indian Rupee extended last week’s losses after Reserve Bank of India Governor Shaktikanta Das flagged concerns about sticky core inflation. Higher oil prices and worries about a wider fiscal deficit also weighed on sentiment. Rupee opened at 71.34 and made low of 71.53 against American dollar. Along with dollar selling by exporters and fall in crude oil prices helped rupee to erase some of its losses. On Overseas front, US market is closed on account of Martin L. King day.  Pound fell for a second day before Prime Minister May was due to address Parliament, having briefed her Cabinet on Sunday that there was little prospect of talks with opposition lawmakers. In such atricky situation, market investors have to look at both domestic and overseas indicators before making any investment decision. 

In such a situation, there is a stock that can give investors arounnd 48 per cent return in long-term perspective. the stock is Rallis India which is currently oscillating arounc Rs 164 levels.

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Pratik Tholiya, Equity Analyst at Elara Securities told Zee Business in a written statement, "Rallis India (RALI IN) reported consolidated revenue of Rs 4.2bn, up 7 per cent YoY, which was slightly below our estimates of Rs 4.3bn. Revenue growth was primarily driven by a price increase in the international markets. Gross margin contracted 257bp to 39.5 per cent and an EBITDA margin shrank 306bp to 6.6 per cent on account of inflationary input cost, several one-offs in other expenses and higher losses in Metahelix. One-off items include INR 49mn towards sales returns, Rs 14mn towards write-off of please expand (CPA) (pharma product launched in the past year, debtor provision of INR 22.4mn (which management believes will be recovered in Q4FY19) and Rs 30mn for upgrading IT infrastructure." He said that the company management has announced Rs 8bn capex plan to be undertaken in a phased manner over the next five years to build capacity in formulations, technical and intermediates for technicals.

On what is his suggestion in regard to RALI IN stock Pratik Tholiya of Elara Securities said, "We believe the new capex plan is the step in the right direction, as the past few years growth was plagued by capacity constraints. Currently, the stock is revolving around Rs 164 levels and a market investor can take a buy position in the stock for a target price of Rs 244."

Standing in sync with Elara Securities views on Rallis India stock; Archit Joshi, Equity Analyst at HDFC Securities told Zee Business online in a written statement, "The topline grew mainly owing to price increases, volume growth was largely flat (both in domestic and international business). As margin pressure persists given lack of availability and higher cost of RM being imported of China, RALI intends to backward integrate its operations in order to reduce dependency on China for imports. It has gained good traction in its new product launches and has delivered a decent volume growth in brands such as ODIS, EPIC, RICEUP." On position that an investor can take in the Rallis India stock he said, "One can buy the stock for at around Rs 160-165 levels and book profit when it touches the levels of Rs 227."