ICICI Securities has 'Buy' on multibagger stock that has surged 145% this year
Premium- The brokerage firm has maintained its Buy rating on the multibagger stock with a target price of ₹1,970 per share
Shares of Grindwell Norton have been among the multibagger stocks of 2021 as the stock has delivered nearly 140% this year (year-to-date or YTD) so far, whereas in a year's period the scrip has rallied over 215%. Domestic brokerage house ICICI Securities sees more upside on the stock.
Grindwell Norton (GNL) is the market leader in the India abrasive market with around 26% market share. The segments include abrasives (contributing around 57%), ceramics & plastics (33%) and IT services & others (10%). GNL has witnessed strong & positive free cash flows consistently over more than a decade irrespective of the macro environment.
Going forward, accelerated growth in performance plastics & ceramics and exports are expected to drive long term incremental growth. Considering strong growth outlook, margins, the brokerage firm has maintained its Buy rating on the stock with a target price of ₹1,970 per share and a target period of around twelve months.
The increase market share in ceramic & plastics with gradual penetration of new value added products, high margin value added products and solutions oriented approach to drive and net debt free, double-digit return ratios & strong cash generation to act as key triggers for future price performance, as per ICICI Securities.
For the quarter ended September, the company reported decent Q2FY22 results as its revenue came in at ₹512.7 crore, up 16.8% YoY crossing normal levels while EBITDA in Q2FY22 came in at ₹101 crore, up 8% YoY with margins at 19.7% impacted by lower gross margins.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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