Experts see 75% upside in this chemical stock in one year. Should you buy?
- Stock market experts are of the opinion that Zuari Global's sugar and ethanol business segment is expected to remain profitable in long term
Stock market today: Chemical stock Zuari Global Ltd (ZGL) has ascended from near ₹90 apiece levels to ₹160 per share levels in last one year, logging more than 75 per cent rise in this period. For last few sessions, Zuari Global shares are under selloff heat and secondary market experts are expecting strong rebound in the counter. They are of the opinion that its sugar and ethanol business segment is expected to remain profitable in long term. They are expecting this chemical stock to surge up to ₹276 from current levels, clocking near 75 per cent rise in one year.
Speaking on the fundamentals that may fuel this chemical stock; HDFC Securities research says, "We are positive on the sugar and ethanol business segment of ZGL due to strength from the long track of operations with experienced management team, its integrated nature of operations with forward integration into co-generation and distillery and improved scale of operations and profitability margins. Improving sugar sale prices, export orientation (due to export subsidy), newly commenced Distillery having capacity of 100,000 litres per day and industry supportive trade policies and measures by state and central government could improve the company’s future prospects."
HDFC Securities went on to add, "Zuari Global Ltd is in progress to monetize its land bank across group companies, which would potentially unlock value for the shareholders and help the company’s other businesses to grow. The company has concentrated on development of Affordable Housing segment which is supported by Government of India’s PMAY (Pradhan Mantri Awas Yojana) scheme. It plans to realize growth in the housing sales through existing extensive product categories in Zuari Rain Forest, Goa and Zuari Garden City in Mysore. Although execution in this space (through development) is slow; other routes to monetise its land bank would yield better result for shareholders."
Zuari Global share price target for 2022
Speaking what technical chart pattern suggests in regard to Zuari Global shares; Anuj Gupta, Vice President at IIFL Securities said, "Chemical stock looks highly positive on chart pattern but one should buy the stock at around ₹130 to ₹135 levels maintaining stop loss at ₹120." Anuj Gupta of IIFL Securities went on to add that short term positional investors can book profit in the counter at around ₹175 to ₹180.
However, HDFC Securities advised positional investors to buy this chemical stock for long term citing, "We think the base case fair value of the stock is ₹235 and the bull case fair value is ₹276 over the next 3-4 quarters."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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