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Anand Rathi
Visaka Ind (Buy)
CMP: ₹645.20
Target: ₹766
Visaka Industries Ltd is engaged in the manufacture and sale of cement asbestos sheets, fiber cement sheets (V-Boards), and panels and spinning (synthetic spun yarn).
Being a diversified operator, Visaka Industries is set to benefit from its expanded Board and Yarn capacities. Its low-cost expansion, high-return products, better working capital and declining debt are other positives. With greater utilisation, ramping up of capacities and an increasing share of non-asbestos products, we expect a better performance.
Valuation: Rising disposable incomes and the government’s thrust on infra and rural housing along with product launches would help Visaka’s growth. We introduce FY20e earnings and retain our ‘Buy’ rating. We assign a PE of 16x FY20e EPS, arriving at a target of ₹766.
Risk: Rise in input costs.
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