March 2024 results are about to be reported in full swing, and, before the same, various Brokerages are coming up with stock price targets discounting for their financial results and many other associated factors.
Listed below is one such ‘fundamentally strong’ company under the ‘small-cap’ category that one should consider adding to their portfolio after a well-known Domestic Brokerage provided a target price of the company’s stock with a potential upside of more than 30 percent.
Gulf Oil Lubricants India Limited
With a market capitalization of Rs 4,960.85 crores, the stocks of Gulf Oil Lubricants India Limited started their trading session on Monday at Rs 1,002.05 and currently trade at Rs 1,008.95, slipping around 5.10 percent compared to the previous close of Rs 1,062.70 apiece. The bearish movement is observed based on weak global market cues. The company’s dividend yield is 2.40 percent.
Emkay Global Financial Services, one of the renowned Domestic Equity Brokerages, gave a ‘Buy’ recommendation on the stocks of Gulf Oil Lubricants India Limited. It provided a target price of Rs 1,350 with a potential upside of approximately 33.65 percent.
The Brokerage provided the above target price based on steady growth in the company’s core volumes, a decent EBITDA margin profile supported by input cost management, strategic pricing, marketing efforts, and many more.
In addition, the lubricant company has made some strategic acquisitions in EV-related businesses and tie-ups with EV OEMs leading to traction for its EV fluids.
Having a glance at the financial performance, the company’s prime indicators of business, viz, its operating revenues as well as after-tax profits, showed a stellar performance with the former increasing from Rs 802 crores during Q2FY24 to Rs 817 crores during Q3FY24, and the latter, during the same period, rose marginally from Rs 74 crores to Rs 81 crores.
Moreover, the company reported decent return ratios during FY23 with a return on equity (RoE) of 19.71 percent and a return on capital employed (RoCE) of 28.56 percent.
Keeping a purview of the last year, the company’s stock has proven to deliver multibagger returns of approximately 145 percent, i.e., if someone had invested Rs 1 lakh into the company’s stock a year ago, it would have converted to Rs 2.45 lakhs.
Gulf Oil Lubricants India Limited, a subsidiary of the Hinduja Group, is engaged in the business of manufacturing, marketing, and trading lubricants and greases used in the industrial as well as automotive industries.
The company caters its products to all types of commercial vehicles to institutional and individual customers across various sectors including automotive, agricultural, construction, marine, and many other divisions.
Written by Amit Madnani
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