Date:
14/09/2015
CMP: 110
Suggested Buying Zone:
110-95;
TGT: 200-250
Holding Period: 12-24 months
TSL<84
Holding Period: 12-24 months
TSL<84
Rationale:
Nandan Denim (NDL) is one of the largest denim manufacturer in
the world and in India, it’s the 2-nd largest. The company is on expansion mode
which may be quite helpful for its growth as huge demand is there.
NDL has strong client base of some of the reputed domestic
players in denim market like Color Plus, Gini & Jony etc.
Apart from strong domestic market, it has also strong supply
chain overseas and around 10% of revenue comes from those developed markets.
Thus it has strong potential to grow sequentially and denim
market is also expected to grow above 15% CAGR in India also. In developed
market, it has much more potential.
Looking ahead, with overall expected economic recovery, India's favorable demographic, increasing urbanization and forthcoming festival season can be the triggers for NDL.
Also increasing acceptance of denims in work place may also act as trigger for such companies, including NDL.
Some risk is there in the form of volatility in raw
material prices (cotton) and FX (Yuan/Dollar/EUR). Also, its top 10
clients contribute nearly 40% of its overall revenue, which poses some risk
also for the company.
As par BG metrics
estimated median valuation of NDL:
Current median valuation
is around: 150
Projected fair valuations are around: 185-225-275 (FY: 16-18)
SCRIP
|
EPS(TTM)
|
BV(Act)
|
P/E(AVG)
|
LV
|
SV
|
MV
|
200-DEMA
|
10-DEMA
|
NDL
|
12.16
|
58.81
|
17.5
|
138.64
|
156.02
|
147.33
|
90.32
|
114.39
|
NDL
|
18.35
|
70.75
|
17.5
|
170.31
|
191.66
|
180.98
|
90.32
|
114.39
|
NDL
|
27.75
|
84.95
|
17.5
|
209.43
|
235.69
|
222.56
|
90.32
|
114.39
|
NDL
|
41.75
|
102.5
|
17.5
|
256.89
|
289.10
|
272.99
|
90.32
|
114.39
|
Technical Charts:
No comments:
Post a Comment