Financial Daily from THE HINDU group of publications
Sunday, Aug 08, 2004
Financial Daily from THE HINDU group of publications Sunday, Aug 08, 2004 |
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Investment World
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Stocks Markets - Recommendation EID Parry: Buy Aarati Krishnan
AT the current price of Rs 245, the EID Parry stock may be a good addition to your portfolio. At a price-earnings multiple of about 8 times its trailing 12-month earnings, the stock trades at a discount to some of the frontline sugar companies. But, being a cyclical business, investors will have to set target returns and book profits when such targets are met, with all sugar stocks. Firm sugar prices, underpinned by an imminent drop in output and an improving policy environment, may help the company sustain robust profit growth in its core sugar business in the current fiscal. Sugar prices have soared over the past quarter and are currently ruling 22 per cent higher than last year's levels. The recent additions to the company's capacities, coupled with the proposal to import raw sugar, may help the company overcome constraints of cane availability. Contributions from new facilities for by-products such as power and ethanol will also add to the company's profit margins over the medium term. Prospects will also be buttressed by robust demand for the sanitaryware business, which will benefit from the construction boom.
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