Recommendation from Speciality Chemicals and Engineering - Industrial Equipments sector

Ninad Ramdasi / 24 Aug 2023/ Categories: DSIJ_Magazine_Web, DSIJMagazine_App, Hot Chips, Hot Chips, Recommendations

Recommendation from Speciality Chemicals and Engineering - Industrial Equipments sector

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.[EasyDNNnews:PaidContentStart]

FOSECO INDIA LTD.
CMP - ₹3753.80
BSE CODE 500150
Volume 4,072
Face Value ₹10
Target ₹4180 - 4300
Stoploss ₹3250 (CLS)

Foseco India Limited specialises in producing additives and consumables for the metallurgical industry. These products are designed to enhance the physical characteristics and overall performance of castings. Considering the company's quarterly performance, it reported a growth of 21.26 per cent from ₹99.75 crore registered in Q1FY23, recording total revenue of ₹120.95 crore in Q1FY24. It has registered operating profit growth of over 50 per cent. Compared to the same quarter last year, the net profit for the first quarter of FY24 soared 162.09 per cent, from ₹10.55 crore to ₹27.66 crore. Demonstrating strong profitability, the company boasts a return on equity of 20 per cent and a return on capital employed of 27 per cent. Also, the price-to-earnings (PE) ratio is in line with the industry average. Shares of the company have climbed around 118 per cent in the past year while providing stellar returns of more than 40 per cent in just one month! Given the comprehensive evaluation of all pertinent factors, we recommend BUY.

PRAJ INDUSTRIES LTD
CMP - ₹490.00
BSE CODE 522205
Volume 2,66,204
Face Value ₹2
Target ₹545 - 563
Stoploss ₹478 (CLS)

Praj Industries is a global company providing various solutions with a focus on the environment, energy and agri-process industry. In June 2023, the company's net sales amounted to ₹736.72 crore, reflecting a modest increase of 0.94 per cent compared to the ₹729.87 crore recorded in June 2022. EBITDA for the same period reached ₹87.61 crore, marking a substantial growth of 42.78 per cent from the ₹61.36 crore reported in June 2022. The quarterly net profit in June 2023 reached ₹58.65 crore, displaying a notable surge of 42.15 per cent in comparison to the ₹41.26 crore achieved in June 2022. In the preceding couple of years, Praj Industries has undergone substantial expansion, primarily propelled by the favourable prospects stemming from the ethanol blending initiative. The company holds a prominent position as the frontrunner in India's ethanol plant sector and ranks prominently among the leading participants in the nation's zero-liquid discharge landscape. Hence, we recommend BUY

(Closing price as of August 22, 2023)

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