Stocks to Buy – Rupa & Company seen as Super Stock of 2022 with 103% upside; buy for long term, says Anil Singhvi

Stocks to Buy – If you are an investor and looking for a stock that could turnout to be a super stock of 2022, here is the one. Zee Business’ Ashish Chaturvedi tells you which stock is likely to be the winner.

This stock is Rupa & Company which is a stalwart in the textile business space. It has over a five decade of experience and have a strong presence and brand recall value in the innerwear space.

The company has also transformed itself and is now manufacturing thermal wears and casual wears. It is now working with international brands like FCUK and FTOL. A high growth trajectory is expected over the next few years.

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The year of 2021 has been very rewarding in terms of its operating performance and the outlook is even better. The income foreseen over the next three years is seen at 16-20 per cent. It is expected to surpass Rs 1900 cr from Rs 1313 cr in FY21. Meanwhile, the profit is also expected to go above Rs 250 cr from Rs 175 cr at the end of FY21.

The company also has plans to expand its business in Southern and Western parts of India, he said.

The company is also bringing a shift in its strategy with a focus on direct distribution.

The shares of Rupa & Company are available at a PE multiple of 17.6 as against its competitors Lux Industries and Page Industries, the shares of which are available at a PE multiple of 33 and 99.8.

This translates into 2.5 times the market cap to sales ratio. For Lux it is 5.6 times while for Page it is over 15 times. The valuations are quite attractive, he said.

Zee Business Managing Editor Anil Singhvi said that the brand is well established in India with experienced promoters. The company’s shift from B2b to B2C is expected to help it immensely, the Managing Editor Anil Singhvi said. This will improve its margins.

The valuations of Rupa & Company shares are very attractive, Singhvi said. He gives the target price of Rs 600, Rs 700 and Rs 900.

Investors must accumulate this stock at every market correction, he advised. It must be held for a long term view.   

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The stock ended at RS 442 on the NSE on Friday, up over 5 per cent from the Thursday closing price.