Buy Savita Oil Technologies, target price Rs 394: HDFC Securities

HDFC Securities has buy call on Savita Oil Technologies with a target price of Rs 394. The current market price of Savita Oil Technologies is Rs 342.15. Time period given by analyst is 2 quarters when Savita Oil Technologies price can reach defined target.

Savita Oil Technologies, incorporated in the year 1961, is a Small Cap company (having a market cap of Rs 2362.20 Crore) operating in Petrochemicals sector.

Savita Oil Technologies key Products/Revenue Segments include Petroleum Products, Export Incentives, Other Operating Revenue for the year ending 31-Mar-2021.

Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 875.47 Crore, down -3.31 % from last quarter Total Income of Rs 905.45 Crore and up 22.00 % from last year same quarter Total Income of Rs 717.58 Crore. Company has reported net profit after tax of Rs 69.80 Crore in latest quarter.

The company’s top management includes Mr.G N Mehra, Mr.S M Dixit, Mr.S G Mehra, Mrs.M C Dalal, Mr.R N Pisharody, Mr.H Sunder. Company has G D Apte & Co. as its auditors. As on 30-09-2022, the company has a total of 7 Crore shares outstanding.

Investment Rationale
The brokerage is of the view that sustained growth in performance of its key business segment of transformer oils along with longstanding client relationships, should support recovery in demand. Further it expects, improvement in both volumes and realisations on account of recovery in auto industry, benefits accruing from global base oil shortage and potential of increased market share due to consumer shift towards organised sector.

Promoter/FII Holdings
Promoters held 71.81 per cent stake in the company as of 30-Sep-2022, while FIIs owned 1.6 per cent, DIIs 7.4 per cent.