HSIL is one of Daljeet Kohli’s favourite stocks. He first recommended the stock in April 2014 when it was at Rs. 136. The stock touched a high of Rs. 477 on 15.04.2015, giving a mid-boggling return of 250% in just 12 months. However, thereafter, the stock lost its way owing to the severe slowdown in the realty sector which cooled off demand for sanitary ware products. After touching a low of Rs. 240 on 11.09.2015, the stock is making a slow and steady comeback and presently stands at Rs. 318. In fact, when the stock had plunged to the said low, Daljeet had implored investors to take advantage of the correction to accumulate the stock. The stock is up 32% since then.
Daljeet is still gung ho about HSIL as is evident from his latest report dated 06.11.2015 in which he recommended a buy and predicted a target price of Rs. 396.
Porinju Veliyath is also a big fan of HSIL. He recommended the stock in the CNBC Investor Camp of 22nd August 2015 (along with four other top-quality stocks). The stock was then at Rs. 258. The stock is up 23% since then.
The consistent logic of these savvy investors is that HSIL has “strong brand, variety of product portfolio, and very strong distribution network across the country” and that this will give it an edge over its competitors when the realty sector revives.
Vineeta Mahnot of Hem Securities has now thrown her weight behind HSIL.
We are familiar with Vineeta Mahnot’s stock picking prowess in the form of Tata Elxsi, Suven Life Sciences, Kwality, Himatsingka Seida, Va Tech Wabag, Fiem Industries, etc, all of which have thrilled investors with magnificent gains though it must be said that some of her stock picks like AIA Engineering, Vaibhav Global, RS Software are a bit sluggish at present.
Vineeta Mahnot has given a detailed explanation on why HSIL is a good buy. The bottom line of her analysis is as follows:
“With changing consumer preferences towards good quality and branded lifestyle products in line with higher disposable income, increasing penetration through wide distribution network, strong brand equity and expansion of product portfolio with right innovations bodes well for the growth of the company. We believe the company is trading at an attractive valuation at 19.39x and 16.59x of FY16EPS of Rs.15.62 and FY17EPS of Rs.18.26. We initiate a ‘BUY’ on the stock with a target price of Rs.400 (appreciation of about 32%) with the medium to long term investment horizon.”
Now, we have to see whether HSIL respects the sentiments of the savvy stock pickers and delivers the promised mega returns!