Momentum Pick: After 81% returns in last 12 months, Grauer & Weil poised for another 25% upside

Despite a weak and volatile market, Grauer & Weil (India) shares have given a robust near 30% returns, this year, and the stock is placed strongly on the charts. The stock has a potential upside of up to 25% aided by technical and fundamental triggers.

Grauer & Weil shares today ended flat at Rs 115 on the NSE. Over a 1-year period the returns given by this stock is more than 84% according to Trendlyne data. In contrast, Nifty50 has returned nearly 4% during this period.

Grauer & Weil was set up as a partnership concern in May 1940 by British nationals – Grauer and Weil. After a series of changes in the promoters it was acquired by the More family in 1991. Growel has been a trendsetter in the general metal finishing industry and has business interests in electroplating, specialty chemicals and engineering equipment. In 2005, Growel ventured into real estate development and built a sprawling 475,000 sq ft Shopping Centre in Kandivali, Mumbai.

Technical View by Nilesh Jain:

Buy | CMP: Rs 115 | Target: Rs 140 | Upside: 21%

Grauer & Weil is trading in an uptrend and the counter looks positive on charts, Nilesh Jain, Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking said. He puts targets of Rs 125 and Rs 140 in this stock. The support is seen at Rs 100.

Investors who have a short term view on this stock must watch out for volatility. The stock has traded with a 1-year beta of 1.36 which is considered very high.


Fundamental view by Sharekhan
Buy | Upside: 25%

Sharekhan has initiated a view on Grauer & Weil (India) Limited and recommends a buy call on this counter. The domestic brokerage company expects a 25% upside in the stock. The stock was recommended at a price of Rs 114.

Sharekhan is relying on its medium to long term growth prospects expecting net profit to grow at a 23% CAGR over FY23E-25E). Valuation of 13X FY25E EPS (discount to historical average one-year PE multiple of 15X) is attractive considering strong growth outlook, healthy RoE of 23% and high net cash & cash equivalent of Rs 253 crore (10% of current market capitalisation),” Sharekhan said in a note.


Key Risks
– Sluggish demand in the automotive and paints Industry

– Volatility in the prices of key raw materials (metals and crude oil)

– Potential impact on mall revenues in case of rise in COVID cases

– Inefficient utilisation of cash for inorganic growth opportunities.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)