Diwali Picks 2020 By Sushil Finance
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ASTRA MICROWAVE PRODUCTS LTD
OUTLOOK & VALUATION
We expect the company’s topline to grow by 5% to Rs. 490.6 Cr and 10% to Rs. 539.6 Cr in FY21E and FY22E respectively. Additionally, bottom line of the company is expected to remain at 9% to 10% levels in FY21E and FY22E. Hence, with a PAT margin of 10.5% in FY22E we expect the PAT and EPS to be Rs. 56Cr and Rs. 6.47 respectively. We have assigned a P/E multiple of ~20X to arrive at a price target of Rs. 133 which provides an upside of ~23% within 18 to 24 months from the current market price of Rs. 108.
Buy Astra Microwave Products Ltd @ CMP 108 TGT 133
Lupin Limited
OUTLOOK & VALUATION
Lupin has strong pipeline of products with limited competition, which are planned to be launched in US and Europe. Company believes, with investment that it has made in women healthcare and speciality products, it is at inflection point and should drive healthy topline growth. We expect ROE to improve from 2.7% in FY20 to 12.9% FY22e. We initiate coverage with a BUY rating for target price of Rs.1,117 for 12-18 months
Buy Lupin Ltd @ CMP 899 TGT 1,117
West Coast Paper Mills
OUTLOOK & VALUATION
The Covid-19 pandemic has impacted the business of the company, with plant shut downs and the nationwide lockdown impacting sales. With schools and offices either shut or operating remotely, need for Educational and Office Stationery has also been impacted. However, long term growth prospects for the industry still stay the same. We have factored in a 25% de-growth in sales for FY21E due to the ongoing pandemic. We expect revenues to recover thereafter and expect sales to grow at a CAGR of 5.6% over FY20-23E. We expect FY23E revenue of Rs. 2,933 Cr and Net Income of Rs. 426 Cr, translating to an EPS of Rs. 64. We assign a P/E multiple of 3x and arrive at a target price of Rs. 192, showcasing an upside potential of ~21% from todays price of Rs. 159, over an investment horizon of 18-24 months.
Buy West Coast Paper Mills Ltd @ CMP 159 TGT 192
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