Recommendation From Textiles And Cement Sector

Dalal Street Investment Journal India's no 1 Financial Magazine selects two aggressive stock picks in every issue, with a 15 day horizon based upon the bullish trend during that period. For this issue, we are recommending companies from the Textiles and Cement sector

Garware-Wall Ropes

CMP: Rs 359 BSE Code: 509557  Volume: 8562  Face Value: Rs 10

Garware-Wall Ropes is betting big on protected farming and aquaculture to boost the country’s rural economy, thereby benefiting both farmers and fisher-folk. It’s a leading manufacturer of technical textiles for Indian and global markets and expected to cross a topline of Rs 1,000 crore in FY17. Net profit has grown by 44.8 per cent to Rs 44.59 crore in 9MFY16 and revenue grew by 9.1 per cent to Rs 638.66 crore in 9MFY16. EBITDA grew by 31 per cent to Rs 76.97 crore due to EBITDA margin up by 202 bps to 12.05 per cent. Further, on the bottom-line front, the company reported strong growth on account of a favourable operating performance and lower interest costs. Going forward, defiantly we will see expansion in operating margin due to lower material prices and higher exports.

Ambuja Cement, the third largest cement manufacturer in India and has a presence in all regions except south. From last two-and-half months,cement prices have rebounded by Rs 20-70 per bag in the north, west and central regions where the company has strong focus on those regions. The better demand after a government issues tenders for road projects in the north was supported by price recovery; similar was the case in west and central India. The government outlay to infrastructure sector and rural economy all rode well leading to expectations that demand will improve. While infrastructure sector accounts for nearly 40 per cent of cement consumption, there are expectations that retail demand led by recovery in rural economy may also improve thereby driving growth in days to come. Therefore we believe the company may post better result in the forthcoming quarters.