Updated: Feb 16, 2021
Birla Corporation Limited
With 15.5m-ton cement capacity across north, central and east India, Birla Corp is aiming at 25 mt cement capacity by FY25.
The ongoing expansion will keep leverage high; we believe, however, that its net debt would be in check with greater profitability on various cost-optimization steps and higher volume growth on the ramping up of capacities.
A judicious geographic- and product-mix aimed at raising the shares of blended and premium cement in its portfolio are positives.
We retain our Buy rating, with an unchanged target of ₹900.
Greater capacity utilization (~85%) and the ramping up of the new capacities would enable strong volume growth and regional diversification.
The company's continued focus on premiumization and brand-conscious home-builders enable Birla Corp’s highest premium-product share of peers along with a better product mix and a higher share of blended cement.
Further, its expanded operations in the price-disciplined central/northern regions (approximately 82 percent capacity) aid its realization/ton to be one of the highest.
Its various cost optimization efforts-set up WHRS and solar power plant, railway-siding, securing coal mines, etc. would boost profitability and return ratios.
Target Price 850
Stop Loss 700
Avanti Feeds Ltd
This company, primarily engaged in exporting shrimps, has delivered unbelievable returns of 37,430 percent in the last 10 years. In fact, in the last one year, the stock has risen 95 percent.
In the last twelve months, the biggest single sale by an insider was when the insider, G. Venkatesh, sold ₹27m worth of shares at a price of ₹551 per share. That means that an insider was selling shares at around the current price of ₹495. While insider selling is negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). G. Venkatesh was the only individual insider to sell shares in the last twelve months.
Insider transactions are not the most important thing when it comes to long-term investing.
The company's share will be 560 not above it.