Visaka Industries is a stock to buy I On Anil Singhvi show, here is what Sandeep Jain recommends

Sandeep Jain today picked Visaka Industries as a stock to buy with a long-term perspective. This stock is currently trading around Rs 410. He said that the reason behind recommending Visaka Industries stock is that rural India is driving the demand for the products of the company. Analyst Sandeep Jain recommended his top pick in today's edition of ‘Jain Sahab Ke Gems’ show with Zee Business Managing Editor Anil Singhvi. Know why Visaka Industries stock has a potential to earn high returns for investors. 

Visaka Industries is one of the best companies in Asbestos segment. The fundamentals of the company are extremely strong. Visaka Industries has done huge diversification in its products in past 5 to 7 years. The company has multiple product portfolios ranging from corrugated cement sheets, fiber cement boards, hybrid solar roofs and manmade yarn. Visaka has launched a path-breaking hybrid roof-top solar product called ATUM the first of its kind in India. Hybrid solar roofs are like solar panels and their efficiency is 20% extra than the conventional solar panels. The company is enabling consultants, builders, architects and applicators in the market to emphasize on sustainable architecture as they help build the future. Visaka Industries has 12 manufacturing units, 13 marketing offices and a PAN India distribution channel of over 7000 dealer outlets.  

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Visaka Industries has set up huge infrastructure. All these distribution networks, interior and exterior infrastructure products are key positives that the company offers. Looking at all these it seems that the company is available at cheaper valuations. Rural areas will need these products more and Budget will focus on Rural Growth which will indeed boost the demand of the products that the company supplies.  

Government has increasingly been focusing in the housing segment. P/E multiple of the stock is around 9, Price to Book multiple is close to 1.1, Dividend yield is 3.83, Profit CAGR for past 5 years is close to 18%. Q1 FY21 profit of the company was Rs 34 cr, the company did extremely well in times when other competitors were bleeding badly. Q2 FY21 profit stood at Rs 22 cr when compared to Rs 13 cr (YoY). Results Visaka Industries have been pretty impressive and promoters have been raising their stake gradually in the company. The stock has not performed for past 3 years and is down 20%. The stock was trading close to levels of Rs 700 at one point of time, it has fallen drastically from upside. Visaka Industries stock should be purchased for target of Rs 470 – Rs 490 going forward.