SIP Stock with Anil Singhvi: Gujarat Ambuja Exports available at attractive valuations; Market Guru says growth outlook STRONG
SIP Stock With Anil Singhvi: In today’s episode of Strong Investment Portfolio (SIP) Stock with Zee Business Managing Editor Anil Singhvi, Senior Research Analyst Varun Dubey recommended a stock that would give high returns to investors. Dubey recommended Gujarat Ambuja Exports. The reason behind picking this stock is the the turnaround happening in the commodities’ cycle
SIP Stock With Anil Singhvi: In today’s episode of Strong Investment Portfolio (SIP) Stock with Zee Business Managing Editor Anil Singhvi, Senior Research Analyst Varun Dubey recommended a stock that would give high returns to investors. Dubey recommended Gujarat Ambuja Exports. The reason behind picking this stock is the the turnaround happening in the commodities’ cycle. This company has business interest in agri products including maize and starch.
Over the last three months, prices of maize have seen an uptick between 25-35 per cent. In Q3 of FY21, the prices have been up by 17 per cent, he said. The maize exports are at a 6-month high. US Maize futures have also gone up by almost 35 per cent over the last 4 months, he further said.
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Meanwhile, future prices of starch have also gone up by almost 60-65 per cent, he added. Gujarat Ambuja Exports has a focus on starch and maize is used as a raw material for making starch. The prices of starch have gone up more in comparison to the raw material.
Around 50 per cent of the revenues for Gujarat Ambuja Exports comes from maize and its derivatives. The company is also expected to gain from the fall in the Indian Rupee.
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The company will gain because of two reasons, Dubey said. One is the turnaround in the commodities cycle and the other is that the lack of enough competition. The company is gaining market share, he further said.
The fundamentals of Gujarat Ambuja Exports are quite strong. The Earnings Per Share (EPS) is expected to be around Rs 20 in FY22 while the cash EPS is expected to be around Rs 30. The company is trading at a PE multiple of 7-8.
Gujarat Ambuja Exports is also expected to gain from its expansion plans. The Foreign Portfolio Investors (FPI) have also been investing in this company.
Gujarat Ambuja Exports caters to FMCG and Pharma sectors.
On this stock, the Market Guru said that the valuations are very attractive, and the company will be able to achieve an EPS of 30-32 in FY22. The Cash EPS could go up to 40, he further said.
The Managing Editor also said that growth outlook remains strong for Gujarat Ambuja Exports. The stock was trading at Rs 143 at the time of recommendation. He puts the target price at Rs 200-225.
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