Sintex Industries – Attractive valuations and great business prospects:
Sintex Industries, in addition to being a leading plastic and textiles company, is also into prefab building monolithic construction, custom moulding and waste water treatment solutions. These divisions have been doing exceedingly well over the last few quarters.
Sintex Industries had recently reported its March quarter numbers and they were simply impressive. The net profits have gone up from Rs 161 crore to Rs 198 crore. With the kind of focus which the government has on low cost and affordable housing, apart from the Swachh Bharat Abhiyan which we are pursuing very seriously and the CSR initiatives by corporates as far as sanitation is concerned, they would all be pretty positive for this company.
So I like Sintex Industries. As far as the valuations are concerned, the company reported around Rs 15 EPS for FY15. So it is currently available at around 7.5 to 8 times, which is quite attractive. So I am bullish on the stock and I feel in a year’s time we could see levels of Rs 175 on the stock.
Kitex Garments – An excellent company, the next Page Industries:
Kitex Garments is an excellent company. It is the world’s third largest manufacturer of infant wear and caters to almost all the leading brands. Recently the company has planned to launch products under its own brand name in the US markets through the ecommerce channel, which I feel could be a game changer. Kitex Garments also came out with its March quarter numbers recently and they were pretty fabulous.
The net profit has almost doubled from Rs 21 odd crore to Rs 42 crore. The company enjoys pretty strong balance sheet with almost negligible debt, high EBITDA margins, high return on equity and return on capital employed. So, I am bullish on the stock. The stock currently trades at around Rs 800 and in a year’s time we could see levels of Rs 1100. I would like to add that if one is willing to hold the stock for another three to five years, you can have a Page Industries in the making.