Recommendation from Construction and Wood Products

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. 

WELSPUN CORP LIMITED

CMP - ₹233.80
BSE CODE 532144
Volume 2,59,030
Face Value ₹5
Target ₹255-263
Stoploss ₹220 (CLS)

Welspun Corp Ltd is one of the flagship companies of Welspun Group. It is a leading manufacturer of large diameter pipes globally, offering a one-stop solution for all line pipe-related requirements with its wide range of highgrade line pipes. It is among the largest Welded Line Pipe manufacturing companies in the world. The company’s quarterly standalone financials reveal that the operating profit for Q1FY23 is ₹148.81 crore as compared to ₹122.51 crore for Q1FY22, an increase of 21.47 per cent. Net sales for Q3FY23 were at ₹1359.75 crore, recording an increase of 53.12 per cent as compared to net sales of ₹888.01 crore in the same quarter last year. The net profit has jumped and stands at ₹80.50 crore since the same period which was at ₹58.73 crore in Q1FY22, a stellar growth of 37.07 per cent. Welspun Corp has a robust order book in the pipeline and is experiencing great demand from the US and Saudi Arabia for its line pipes and long steel products. The company has recently commissioned a state-of-the-art Blast Furnace and Sinter plant, and TMT Bars manufacturing facility at Anjar, Gujarat through its wholly owned subsidiaries to expand its production capabilities. Hence, we recommend BUY.

RUSHIL DECOR LTD.

CMP - ₹556.05
BSE CODE 533470
Volume 4,406
Face Value ₹10
Target ₹600-612
Stoploss ₹534 (CLS)

Rushil Décor serves the laminate and MDF panel boards market in India and has a presence in close to 42 other nations. The 1993-founded business is now the go-to resource for discerning clients all over the world. The company’s quarterly consolidated financials reveal that the operating profit for Q1FY23 is ₹47.69 crore as compared to ₹1.69 crore for Q1FY22. The Net sales for Q1FY23 were at ₹210.78 crore, recording a jump of 131.65 per cent as compared to net sales of ₹90.99 crore in the same quarter last year. The net profit has soared and stands at ₹27.20 crore against the net loss of ₹7.58 crore recorded in Q1FY22. The P/E ratio of 20 makes them attractive to investors. Along with that, it has an ROE of 8.28 per cent. The company has recorded growing operating profit laterally with a higher operating margin. The EPS has also jumped to 13.66 per cent from 7.74 per cent in the previous quarter. The profit after tax stood at ₹33 crore a 26 per cent rise in the March quarter. Hence, we recommend BUY.

(Closing price as of Aug. 23, 2022)