Multibagger Midcap Stock Gets "Buy" Call For High Return, Suggested By Nirmal Bang

Stock Performance and Outlook

The stock of Apar Industries last traded at Rs 2,326.35 apiece, down 1.78% compared to its previous close. The stock recorded its 52 week low on 11 May 2022 at Rs Rs 556.25 apiece, and its 52 week high on 17 February 2023 at Rs 2,433.60 apiece, respectively.

The stock has given 2.89% positive return in 1 week, 15.4% in 1 month and 47.57% in 3 months, respectively. The stock gained 79.9% in the past 6 months. In the past 1 year, the stock gave 272.54% multibagger return. In 5 years it has given 197.89% positive return.

Cables and Conductors to drive next leg of growth; Expect structural shift in profitability

In the report, the brokerage stated, "We spoke to Mr. Ramesh Iyer, CFO of Apar Industries Ltd (Apar) as part of our virtual Investor Conference to gain insights into the current business environment, demand trends, commodity costs and supply chain headwinds, besides the company's business outlook going ahead. The management highlighted that the demand scenario over the next couple of years remains strong, particularly for the Cables and Conductors segments. Apar expects to clock 10-15% volume CAGR in the Conductors segment over the next couple of years."

It added, "The company expects to clock 25-30% revenue CAGR in the Cables segment over the next couple of years. Apar has the highest number of UL certificates of compliance from India for the sale of Cables in the US market. We believe that export of cables, particularly to the US market, is likely to drive growth in the Cables segment over the next decade (as US imports USD20bn worth of cables annually). Further, Apar's margin profile is likely to improve significantly as the share of Cables (which is a margin-accretive business) increases. Hence, this makes the case for re-rating of Apar."

Buy for a target price of Rs 2,725/share

IDBI Capital said, "We have tweaked our numbers marginally besides upgrading Apar to BUY (from ACCUMULATE earlier) with a revised target price (TP) of Rs2,725 (vs Rs1,880 earlier), valuing the company at 15x FY25E EPS (vs 13x earlier). We have moved forward our valuation to FY25E (vs Spet'24E earlier)."

Disclaimer

The stock has been picked from the brokerage report of Nirmal Bang. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.