Stock : GINI SILK MILLS LTD.
Recommendation : BUY
CMP : Rs. 17.00
Target : Rs.55-65
The company is involved into manufacturing of printed and woven semi-finished fabrics, textile processing and trading. The industry overall has a very high growth potential in coming years with the pace of growth we are having today. Also the company is involved in trading of textile products which gives it an edge over the others. Although not a very popular player in the industry but looking at the financials it is a worth buying keeping in mind a long term horizon and a handsome returns over a period of 2-3 years with a consistent dividend yield. The company has improved its performance & profitability significantly over the years and we are expecting it to continue the same.
Key Financial :
| FY 2007-08 | FY 2006-07 | FY 2005-06 | FY 2004-05 | FY 2003-04 | |
| Profit After Tax (Rs. Cr) | 2.40 | 0.90 | 0.61 | -0.63 | -0.02 |
| Net Profit Margin | 8.20% | 3.84% | 2.96% | ||
| EPS (Rs.) | 4.23 | 1.59 | 1.08 |
Current Market Price : Rs. 17
52 Weeks Low : Rs. 12
52 Weeks High : Rs. 29.80
Debt-Equity : 0.12
Price/Earning : 4.7
Price/Book Value : 0.98
The stock is currently quoting near to its 52 weeks low of Rs. 12.00 from the CMP the downside is limited whereas we can see very good upmove when the overall markets will stabilize. The stock is available at less than book value of Rs.20.74/share with a very good debt-equity of just 0.12. Considering the overall growth in the company as well as the industry, with very good valuations right now one can buy the stock with a long term view of 2-3 years for a target price of Rs.55-65 per share.
Disclaimer : The above mentioned view is the personal view of the author, one should consult his financial analyst before taking any position in the above mentioned stock and author takes no responsibility for any losses occurring by acting on basis of this report
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{ 1 comment… read it below or add one }
Benedict, it is a great post thanks for posting it!