Hem Securities sees 54% upside in Sunil Singhania-backed ION Exchange stock; know what will likely trigger this stock?

Hem Securities has maintained a Buy rating on ION Exchange stock and sees an upside of 54 per cent. This brokerage is of the view that the investors should invest in company. It sees a growth in capex cycle for manufacturing companies as the sector is likely to increase adoption of environment-friendly measures which also includes water treatment plants in factory premises. 

It has initiated a Buy rating on the stock and values the stock at 17.0x FY23E earnings to arrive at the target of Rs 2526 per share.

See Zee Business Live TV Streaming Below:

Ace investor Sunil Singhania’s Abakkus Asset Manager LLP holds 4,11,000 equity shares which translates to nearly 3 per cent stake in this water management company. 

The company’s Return on Equity is 30 per cent and company is debt free.  

At this market cap, the company has potential to become double in size. It has new contracts with Uttar Pradesh government and clean ganga project. 

 The brokerage estimates capital expenditure on water and wastewater infrastructure in India to increase by 83 per cent over the next five years, hitting an annual run rate of US $16 billion by 2023. Capex on water reuse may grow at a CAGR (Compound Annual Growth Rate) of 19.5 per cent. 

Besides, the government plans to spend 200 billion in next 5 year to clean ganga project and global water treatment chemical market size is expected to grow $ 39 billion in 2021 to $461 billion in 2026, Hem Securities said in a report. 

The stock has corrected down by 30 per cent in the last 6 months, as compared to over 3 per cent fall in the S&P BSE Sensex. While it has reported a jump over 18 per cent in the last one year as compared to nearly 15 per cent rise in the benchmark index. 

The counter at around 12:35 on Tuesday is trading flat with negative bias to Rs 1637.3 per share as against 0.41 per cent fall in the S&P BSE Sensex.