Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Research

| More

Gladiator Stocks - Berger Paints - ICICI Securities

Posted On: 2020-08-12 02:53:07


Strategy

Buy Berger Paints: in the range of Rs. 540.00-553.00 for target price of Rs. 635.00 with a stop loss of Rs. 497.00. Time Frame: Six months

Technical View

- The stock has registered a resolute breakout above the falling supply line joining highs since Feb'20 (Rs. 597) signalling resumption of the primary up trend thus offering fresh entry opportunity

- Structurally the stock has been trading in a secular up trend. Key point to highlight over past four years is that, on multiple occasions buying demand emerged in the vicinity of 52 weeks EMA coincided with demand line joining lows since July 2019 (Rs. 302). Currently both of these are placed around Rs. 500-490 levels which is expected to act as major value area for the stock in case of any corrective decline

- The aforementioned evidences makes us confident to believe, stock would resolve higher and accelerate upward momentum towards Rs. 635 in the medium term as it is 123.6% external retracement of Feb-Mar 2020 decline (Rs. 597 - 390), placed at Rs. 635 levels

Fundamental View

Berger Paint (BPIL) is the second largest decorative paint player in India with an organised market share of ~17%. The company has kept its market share intact despite aggressive expansion by the leader and other MNC paint players in domestic market. In the last five years, BPIL has invested heavily in capex, brand building (average 5% of sales in the last five years) and product innovation with a strong balance sheet position.

Berger Paints reported strong domestic volume growth in the first two months of Q4FY20. However, domestic revenue (~ 87% of consolidated sales) declined ~13% YoY in Q4FY20 (higher than industry leader) mainly due to ~45% lower volume offtake in March 2020 owing to lockdown. Lower realisation was largely due to a change in product mix. However, the company has not initiated any price cut despite recent decline in raw material prices. However, the management guided that future price cuts on selected product categories cannot be ruled out given the softness in input prices. Unlike industry leader, Berger Paints has low revenue exposure in metros. Hence, it is better positioned to cater to pent up demand in tier II, tier III cities post easing of lockdown. While the product mix is likely to stay skewed towards low end product categories, the revival in maintenance related works would help drive volume growth in the medium term. Gross margin is likely to stay elevated due to a sharp fall in monomers and solvent based product prices.

Berger Paint is likely to report strong earning CAGR of 22% FY20-22E supported by a recovery in demand and elevated margins (backed by benign raw material prices). With minute D/E (of 0.2x), strict working capital management led to strong cash flow from operation (up ~60% YoY) in FY20. We maintain our positive stance on the stock given its strong balance sheet position.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GladiatorStocks_BergerPaints_Aug20.pdf

Shares of BERGER PAINTS INDIA LTD. was last trading in BSE at Rs.547.85 as compared to the previous close of Rs. 551.6. The total number of shares traded during the day was 70260 in over 3306 trades.

The stock hit an intraday high of Rs. 560.5 and intraday low of 545.55. The net turnover during the day was Rs. 38880698.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

HeidelbergCement India - Play on better priced Central India; initiate with BUY - ICICI Securities

Healthcare - Diagnostics: Multiple tailwinds likely to emerge - ICICI Securities

Mazagon Dock Shipbuilders Ltd - IPO Review - ICICI Securities

Persistent Systems - 28th September 2020 - Angel Broking

Canara Bank - 28th September 2020 - Angel Broking

Subscribe to UTI Asset Management Company Limited - IPO Note - Angel Broking

Multiplex Sector - Mr. Jyoti Roy - DVP - Equity Strategist, Angel Broking Ltd

Sale of Sequent stake to Strides Pharma - Angel Broking

Subscribe to Mazagon Dock Shipbuilders Ltd - IPO Note - Angel Broking

JSW Energy - First big renewable step - ICICI Securities

V-MART Retail - Best play in value fashion segment; initiating with BUY - ICICI Securities

Gas sector - New winners and losers likely on policy changes in gas sector - ICICI Securities

Mazagon Dock Shipbuilders Limited - IPO Note - Geojit

UTI Asset Management Company Limited - IPO Note - Geojit

Preview on RBI Monetary Policy - Oct 2020 - Shanti Ekambaram

Rollover Report for September 2020 - October 2020: Angel Broking

Covid Recovery Pulse - Sep 25, 2020 - ICICI Securities

Quick Comment - Suven Pharmaceuticals - ICICI Securities

Derivatives Strategy - Sep 25, 2020 - Positional Option - ICICI Securities

Gladiator Stocks - Ramco Cement - ICICI Securities

IPO Review - UTI Asset Management Company - ICICI Securities

Stock of the Day - Zensar Technologies - Sep 25, 2020 - Angel Broking

Accenture Q4FY2020 Result - Angel Broking

Granules India receives ANDA approval - Angel Broking

Zydus Cadila receives US FDA approval - Angel Broking

Cipla - ANDA approval - Mr. Yash Gupta - Equity Research Associate, Angel Broking Ltd

Mindspace REIT - Mr. Yash Gupta - Equity Research Associate, Angel Broking Ltd

UTI AMC - IPO - Mr. Jaikishan Parmar - Sr. Equity Research Analyst, Angel Broking Ltd

Balkrishna Industries - Growth momentum continues - ICICI Securities

Rollover Analysis (September 25): Nifty starts October series with low OI amid high volatility

Derivatives View (September 25): Sell Bank Nifty in range of 20650-20750 - ICICI Securities

Rollover Analysis - Sept 20: Selling climax on expiry as markets crumble - YES Securities

Zydus Wellness - Leadership in niche categories; initiate at BUY - ICICI Securities

Power - Setting the stage - ICICI Securities

Company Update - Elgi Equipments - ICICI Securities

Nano Nivesh - The Anup Engineering - ICICI Securities

RBI OMO announcement of Rs. 10000 crore - Angel Broking

TCS deal win - Sep 24, 2020 - Angel Broking

View on Pre-Monetary Policy by Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank

US FDA approval to Zydus Cadila - Angel Broking

HDFC Securities Institutional Research Desk: Cement Sector Thematic - Spotting the sweet spot

Bharat Forge - Expectation hurdle remains steep - ICICI Securities

Auto

Mutual Fund Review - September, 2020 - ICICI Securities

UTI AMC announces IPO date - Angel Broking

Asian Paints - Mr. Amarjeet Maurya - AVP - Mid Caps, Angel Broking Ltd

Britannia Industries - Mr. Amarjeet Maurya - AVP - Mid Caps, Angel Broking Ltd

Hexaware Technologies (Not Rated): Hexaware accepts 475/share as final delisting price - ICICI Securities

CAMS IPO - Day 2 Subscription - Angel Boking

Chemcon Speciality Chemicals - IPO subscribed 12.62 times on second day - Angel Broking







Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019