Savita Oil zooms 7% as Street sees strong upside owing to robust fundamentals, attractive valuations

Stock to Buy: Savita Oil - Savita Oil share price jumped 7 per cent in intra-day trade on Thursday as the Street sees the Mumbai-based automotive oil firm poised to gain further from hereon basis strong fundamentals, balancesheet and attractive valuations. On Zee Business, market expert Sandeep Jain has also picked the stock as his pick in TV show 'Jain Sahab Ke Gems'.

The company holds brands like Castrol and Savsol. He said that the stock does not enjoy high valuation in the markets and trade at low PE multiple. This is one reason why he is drawn towards this stock, Jain further said arguing for a limited downside in this stock. It has a 35 per cent market share in white oil and transformer oil with a very strong clientele. 

The stock is trading at a PE multiple of 7-8 with return on capital employed at 30 per cent while return on equity at 21 per cent, Jain informed. The Dividend payout is quite significant and Savita Oil is a debt-free company. 

The company has a profit CAGR of 31 per cent while Sales CAGR at 14-15 per cent.The net profit in the June 2022 quarter stood at 88 per cent. In the TTM basis, the PAT is at Rs 250 cr and is highest ever. The market cap is around Rs 2000 cr. 

The promoters hold around 71 per cent while the FIIs/DIIs hold 7-8 per cent. The trading volume was around 2,77,742 around this time. 

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जैन सा'ब के GEMS ...

आज Savita Oil को क्यों चुना संदीप जैन ने ?

संदीप जैन से जानिए कंपनी के फंडामेंटल्स, तेजी के ट्रिगर्स और टार्गेट...@AnilSinghvi_ | @SandeepKrJainTS | #StockMarket #StocksToBuy pic.twitter.com/YkIwcxxpeU

— Zee Business (@ZeeBusiness) October 27, 2022

He recommends buying at current levels and gives two targets - one at Rs 340 and another at Rs 360.   

The stock was trading at Rs 316 and was up nearly 7 per cent at 10:36 am. It was recommended at a price of Rs 306. The stock has an upside of 18 per cent from the recommended price.

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)