Recommendation from Sugar and Metals - Castings/Forgings Industries

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. 

E.I.D.-PARRY (INDIA) LTD.

CMP - ₹597.60
BSE CODE 500125
Volume 24,281
Face Value ₹1
Target ₹635-647
Stoploss ₹553 CLS)

E.I.D. Parry (India) Limited is a listed company engaged in the business of manufacturing sugar and nutraceuticals. The company’s quarterly consolidated financials reveal that the operating profit for Q1FY23 is ₹753.10 crore compared to ₹491.79 crore for Q1FY22, up by 53.13 per cent. The net sales for Q1FY23 were at ₹7,146.47 crore, recording a jump of 64.12 per cent as compared to net sales of ₹4,354.49 crore in the same quarter last year. The net profit has soared and stands at ₹493.54 against the net profit of ₹278.01 crore recorded in Q1FY22, an increase by 77.53 per cent. The company has recorded the highest export volumes during the current season. In addition to this, the government has announced sanctioning of additional export volume which means the volume might go beyond 10 million tons this season. The Sankili distillery 120 KLPD project is expected to be ready for commercial production by Q4 of this financial year. The EPS of EID Parry has also been growing consistently since the past five years. Hence, we recommend BUY. 

Rolex Rings Ltd

CMP - ₹2068.90
BSE CODE 543325
Volume 8,402
Face Value ₹10
Target ₹2200-2300
Stoploss ₹1910 (CLS)

Rolex Rings is one of the top five forging companies in India in terms of installed capacity and a manufacturer and global supplier of hot rolled forged and machined bearing rings and automotive components for certain segments of vehicles including two-wheelers, passenger vehicles, commercial vehicles. The company’s quarterly consolidated financials reveal that the operating profit for Q1FY23 is ₹70.88 crore compared to ₹57.51 crore for Q1FY22, up by 23.26 per cent. The net sales for Q1FY23 were at ₹286.78 crore, recording a jump of 26.13 per cent as compared to net sales of ₹227.36 crore in the same quarter last year. The net profit has soared and stands at ₹49.72 crore against the net profit of ₹30.32 crore recorded in Q1FY22, an increase of 63.98 per cent. RRL is a great investment because of its loyal customer base, growing market share among current clients, rising operational efficiencies driven by increased utilisation and improved promoter holding. Hence, we recommend BUY. 

(Closing price as of Sept. 30, 2022)