Top Stocks to Buy: In this edition of ‘Maalamaal Weekly’, Zee Business Managing Editor Anil Singhvi has revealed the name of another fine stock that has the capability to earn good returns for investors. This stock is from the chemical space and the company manufactures food preservatives, performance chemicals and flavours among other things (#ZeeMaalamaalWeekly).
Research Analyst Ashish Chaturvedi picked Camlin Fine Sciences Limited as a stock to buy. It has subsidiaries in China, Mexico and Italy. Its products are exported in over 80 countries and 87 percent of its income is accounted from exports, he said.
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The company has overcome its 2018 setback when one of its major clients terminated a contract. It has seen a major turnaround as even the top 10 clients account for only 35 per cent of its revenues. It shifted operation of the international subsidiaries to India which has drastically improved its operational efficiency.
The biggest trigger for this company is its Dahej unit where trial production has started and the commercial production is likely to start in this quarter. This would further increase its efficiency.
The operating cash flows are now seeing an uptick after remaining in a negative territory for over three years. This company posted a loss of Rs 30 cr at the end of FY18. In FY20 it posted a profit of Rs 30 cr.
Commenting on this company, the Market Guru said that since this was a turnaround story, it may have started late. He said that the next two years will be critical for Camlin. The company will benefit from its expansion plans as the margins would expand by 3-4 per cent from Dahej plant.
He also said that Harsha Raghavan’s entry on company board will serve the company well. Raghavan has a proven track record and also bought stakes in the company.
From the stock perspective, Singhvi said that all chemical sector companies are currently trading at premiums as the companies have benefitted from the import of Chinese chemicals.
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The stock is available at attractive valuation and there is very little to lose in it from here. He added.