This Ashish Kacholia stock may yield 62% return on strong outlook; share price up 11% since robust Q1 results

Ace investor Ashish Kacholia-owned glass manufacturing company – La Opala RG share price has jumped nearly 6 per cent to touch the day’s high of Rs 338 per share on the BSE and NSE intraday during Tuesday’s trading session on the back of heavy volumes and positive outlook. 

La Opala RG share price has been surging since the company reported strong earnings in the April-June quarter for the financial year 2022-23 (Q1FY23). It surged over 11 per cent in the last five trading sessions. The counter gained 4 per cent to close at Rs 333.95 on the NSE and 5 per cent on the BSE to settle at Rs 336 apiece today. 

The small-cap company reported more than double revenue and profit during Q1FY23. The former stood at around Rs 83 crore from Rs 37.4 crore year-on-year (YoY), while the latter came at Rs 20.07 crore from Rs 8.85 crore YoY, according to the company’s exchange filing on August 13, 2022. 

Ashish Kacholia, who is also fondly called as Big Whale of the Indian stock markets, holds 15,79,933 equity shares or 1.42 per cent stakes in La Opala RG, as per the June shareholding pattern of the company available on the exchanges. 

Even brokerages are bullish on the share price of La Opala RG on the back of strong earnings and a positive growth outlook ahead. Brokerage firm Monarch Networth Capital maintained Buy rating with a revised target of Rs 516 per share from Rs 488 apiece, implying a nearly 62 per cent upside. 

The better-than-ever surge in growth is evident from the brokerage’s recent channel checks that indicate that the product has been steadily taking market share away from bone china, steel etc; the structural shift to opal ware is likely to get more pronounced, it said. 

With the recent capacity expansion, Monarch Networth Capital believes that La Opala is well-positioned to capture incremental market share and the company’s likely expansion into Borosilicate glass provides a further avenue of growth given the structural shift toward the glass and other allied products. 

The management sounded confident about the overall demand environment across channels and expects the share of e-commerce to rise further, another brokerage Nirmal Bang said in its report. 

Overall, Nirmal Bang building in Revenue/EBITDA/APAT CAGR of 27/31/35 per cent, respectively, over FY22-FY24E and believes that the company is undervalued, taking into account its earnings visibility, market positioning, healthy balance sheet, and future expansion plans.  

Therefore, the brokerage maintained a Buy rating on the stock with a target price of Rs 400 per share, while implying an upside of over Rs 25 per cent (PE 25x on FY24E earnings).