CMP 117 BSE 17082On perusing the 2 year Price Charts, it becomes evident that the Stock is on a roll; the Charts are definitely positive. On the downside, a strong support exists at 102 levels, which, in my opinion, should hold. Below this there is a multi year support at 89 levels which one would not expect to be even touched, barring a Market meltdown. On the upside, there is a supply zone in the 120-122 range close to the 52 wk high and a break above that could see the Scrip go upto 133 levels in quick time.
FUNDAMENTALS:
The Company has a lot going for it here as well; excellent Results particularly in the last two Quarters; a slated 25% growth in topline as well as bottomline apiece over the next two years; 16% approx EBIDTA Margins guided; capacity expansion kicker in place; great Brand pull; robust Demand increment pool etc etc. The Company is on-course to do an EPS of about 10.5 for FY12 and approx 13 in FY13, which puts it at about 11x FY12E and about 9x FY13E at CMP 117, which seems fairly attractive. The main spoiler, if at all, could be the input cost escalation for both raw material as well as motive Gas, but that, I guess, is par for the course.
Therefore, in my opinion, KAJARIA CERAMICS is a staggered buy at CMP 117 and all dips upto 100 levels., with safe upsides of about 25% over the next 12 months.
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