HDFC Securities has a buy rating on the shares of HSIL Ltd that have rallied to give multibagger returns of 139.60% in the past year.
The shares of HSIL increased by 12.23% in the past week, and are currently trading at ₹350.10 apiece. A year ago, they were trading at ₹146.70. This means that if an investor would have invested ₹1,00,000 in the share a year ago, the value of their holdings would have been ₹ 2,39,600 today!
The brokerage suggested that the stock can be bought in the price band of ₹311- ₹318. It said that the base case fair value of the stock is ₹349, whereas its bull case fair value is ₹ 399 over the next two quarters. Further, it said that investors can add more of the stock at dips when the stock is at the ₹ 272- ₹ 276 price band.
Over the years, the company has built a strong product portfolio and improved the product mix, which helped in improving its realization. It has entered into the high-margin speciality glass segment that might further strengthen its presence in the glass packaging segment, according to HDFC Securities.
Further, the company has a long‐term association with customers and supply chain partners. Strong industry tailwinds and utilization across diverse sectors would support strong growth momentum, the brokerage said.
It added that foray into high margin speciality glass catering to perfumery, cosmetics industry among others, likely price hikes, and capacity expansion due to debottlenecking would improve its topline growth and expand margins.
Its competitor Hindusthan National Glass & Industries Ltd has proceeded for insolvency and HSIL will benefit in the medium term due to the likely disruption of industry-wide glass container volumes.
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