I have recommended Nilkamal Ltd at Rs. 330/- on my "Diwali Recommendation" list. Unfortunately this stock (perhaps the only stock from my investment list) not performed well ( forgot about it touched over Rs.380/- after my recommendation). Due to a fall in crude oil prices and a reduction in the company's debt, I expected it would register a better result for the September quarter. Nilkamal has reported a sales income of Rs. 460 crore in September quarter against Rs. 423 crore registered in the same quarter of the previous year. Against my view, its raw material cost increased to Rs. 186 crore from Rs. 147 crore. Mainly, high raw material cost caused a fall in its NP to Rs.6.9 crore from Rs.12.5 crore. However the result shows a marginal improvement from the June 2014 quarter. Still I suggest the investors to HOLD the stock for better return as the raw material cost benefit may get in the coming quarters and still Nilkamal capable to deliver an EPS over Rs. 20/- in the FY 2014-15. When we considering the valuation of plastic moulded products industry in the market it is better to stay invested in the stock at least for the time-being.
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