[T.S.R:16110] Uflex-Revised Target Rs 440 (AnandRathi)

U FLEX

CMP 318/-

 

RESULTS & TARGET UPDATE:

 

Company has come out with fantastic results in Q2FY11, much better then our expectations. [See result table below] The realizations of the polyeter films have increased further by Rs. 10 per Kg last week, taking it to Rs. 235/- per Kg. This will boost profitability of sector further for coming quarters. In view of these developments, we are raising our target for next 12 months to 440/-. 

 

·         FMCG products - particularly daily consumable food and utility items are not affected by any recession or slowdown and hence Uflex's business is also recession proof as it predominantly caters to this segment of economy.

·         The small unorganized players are far behind in integration and hence they are not able to pose any meaningful threat to its business. Rather due to size, integrated operations and better quality, company gets orders from larger clients and thus offers better earnings visibility.

·         The additional lamination capacities in Jammu will boost quantum of value added products further. The new POlyster film capacities commissioned in Mexico will add to top line and bottom line from current FY, similarly Egypt facilities will add only partially this year and full from next FY. Once these new facilities are stabilized and reach full contribution stage, the top line and bottom line will shoot up.

·         Company is also looking to diversify in to other packaging segments like Poly tubes for personal care/Pharma product applications and we are expecting announcements regarding this before FY end.

·         Company may also opt to grow inorganically, by acquiring packaging companies in US or Europe, to acquire bigger MNC client relationships and reach out to global markets in future.

·         So growth potential is immense and this along with recession proof nature of business, deserves a much better discounting for company from current historical 4X.

 

 The stock is still looking very attractive even at current levels and we are revising our price target to Rs 440/- for next 12 months.

--
For Anything related with Stock market be Online at
http://www.niftyviews.com/
 
Get free updates on your mobile phone. Sms "Join TSR " and send to 09223492234
 
FOR TRIAL STOCK/NIFTY/OPTION CALLS
 
 
You received this message because you are subscribed to Google Group "STOCKRESEARCHER" group.
To post to this group, send an email to STOCKRESEARCHER@googlegroups.com
 
To unsubscribe email
Stockresearcher-unsubscribe@googlegroups.com
 
for more info visit
http://groups.google.com/group/STOCKRESEARCHER?hl=en-GB
.
This is Not a Spam Mail.
Disclaimer :-
"The opinions expressed by the members on this board are based on
their individual experience and perceptions and to share information
with other members with the best of intentions to help fellow members
in investment decisions as equity investment is a risky venture."