In a chat with Zee Business Managing Editor Anil Singhvi, market analyst Varun Dubey said that the stock which is on the radar today is Himatsingka Seide. It is a textile sector company and though FY21 has not been good for this company, it is ready to show strong growth in the coming days and the valuation of the company is also cheap.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Speaking about the triggers, the market analyst said that the demand is continuously on the rise in home textiles, which will benefit the company. Secondly, China is being boycotted globally and this is also hugely benefiting the home textiles companies.

 

See Zee Business Live TV Streaming Below:

He said that around October-November, around 11,000 crore market of China shifted towards other countries and India has profited from it as the country received huge orders. The company has good exposure in America and Europe but because of the increase in coronavirus cases and lockdown the revenues of the company were hit, he added.

He said that now the economy is opening up in North America and Europe and even the benefits of vaccination there will be received by the company. Himatsingka Seide has also tied up with Walt Disney which will also add to the revenue of the company.

 

The company has also spent a lot in capacity expansion in FY19-FY20 and is prepared for new orders. He added that the company has reduced the net level debt of Rs 285 crore during the pandemic which is a great thing.

The market analyst said that the ROCE of the company is around 4 which will increase in FY22 to around 11 and ROE can be around 14.

The Managing Editor said that the growth will come because of completing a big Capex plan. The Capex plan was 2.50 crore. The second reason is that the growth outlook of the company is very strong. He added that the big department stores in America, where the products of the company are delivered, good growth can be seen.

He added that the demand for home textile furnishing is also increasing in India. Brands like CK, Tommy Hilfiger are also with the company which helps in increasing the growth outlook.

The revenue and cash flows of the company will improve and in the coming 1 year the company will significantly reduce its debts and after that ratio will become more good and strong, the Managing Editor said.

He said that return on equity is around 16, return on capital is around 11. Rs 444 is the lifetime high made by this stock and is now available around Rs 150-160. He kept a target of Rs 215- 225.

Speaking on the same, Jay Thakkar said that a breakout was seen last in the stocks of Himatsingka Seide and we can expect a good buying in this company this week. The short term target for this company is Rs 165, positionally it is Rs 177 while 149 is good support.

Expert Sandeep Jain said that he was observing the shareholding pattern and FIIs, DIIs are showing huge confidence in the stock.