Buy GHCL; target of Rs 898: Arihant Capital

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

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Arihant Capital's research report on GHCL

GHCL Ltd. is the largest single location manufacturer of Soda Ash in India. It has a plant facility at Sutrapada in Gujarat. It reported its Q4FY22 earnings which were robust and above our estimates. The company has benefitted from operational efficiencies and supportive industry dynamics in soda ash segment.

Outlook

The Textile business is valued by applying 25% discount to its replacement cost, yielding per share value of INR 98. Accordingly, we maintain our BUY rating on the stock with the Target Price of INR 898 per share.

For all recommendations report, click here

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