Recommendation from Paper & Forest Products and Speciality Chemicals Sectors

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.

ANDHRA PAPER LTD
CMP - ₹609.70
BSE CODE 502330
Volume 94,619
Face Value ₹10
Target ₹680- 720
Stoploss ₹578 (CLS)

Andhra Paper Ltd stands as one of the largest integrated paper and pulp manufacturers in India. Founded in 1964, the company specialises in the production of writing, printing, and copier papers catering to both foreign and domestic markets. Operating from its production facilities in Rajahmundry and Kadiyam, the company boasts a combined production capacity of 2,40,000 TPA. The company delivered an impressive performance in FY23, with revenue surging more than 50 per cent to ₹2,097 crore, compared to ₹1,380 crore in FY22. Net profit also experienced a robust surge of 274 per cent, reaching ₹522 crore. However, the last quarter's performance was lacklustre, as revenue showed almost no growth compared to the same quarter last year, while net profit declined by around 11 per cent year-on-year. On the contrary, the company's shares experienced a strong rally, climbing 50 per cent over the last 6 months. Given the recent attainment of a 52-week high at ₹675, there appears to be upside potential for shares currently trading at ₹605. Therefore, we recommend BUY.

Balaji Amines Ltd
CMP - ₹2,612.75
BSE CODE 530999
Volume 1,03,528
Face Value ₹2
Target ₹2,780 - 2,900
Stoploss ₹2,340 (CLS)

Balaji Amines Ltd is a leading manufacturer of Aliphatic Amines in India. The company experienced a dismal performance in the last quarter, reflecting the broader weakness in the chemical industry due to demand challenges and China's dumping strategy. Contrary to the prevailing weakness, the shares exhibited a robust rally, surging by over 25 per cent in the last month. The company has announced its proposal to establish a solar power plant near Solapur, Maharashtra, and has already commenced a solar power generation plant for captive consumption. Additionally, it was reported that the ongoing expansion project for n-Butylamine is advancing rapidly and is anticipated to be commissioned in the fourth quarter of FY24. The company forecasts that the Phase-2 and 3 expansions will necessitate a capital expenditure of ₹300-350 crore spread over FY24 and FY25. This expansion presents a significant opportunity to introduce new products and gain a first-mover advantage. Hence, we recommend BUY.