Sree Rayalaseema Hi-Strength Hypo Ltd
NSE CODE- SRHHYPOLTD
CMP – 435
RATING – BUY
SRHHYPOLTD is part of the TVG Group based out of Kurnool, Andhra Pradesh. It is a leading producer of Calcium Hypochlorite, Stable Bleaching Powder, Sulphuric Acid, and other chemicals.
The Co owns two Stable Bleaching Powder Plants, three Sulphuric Acid plants, Chloro Sulphonic Acid, and Calcium Hypochlorite plants. The company also owns a 10MW thermal power plant and solar power plant of 1 MW capacity at Kurnool. The company is in the process of setting up another 5 MW capacity solar power plant at Kurnool, Andhra Pradesh.
The Co has investments of 50 crores as of March 2021. It holds 19.18% equity in TGV SRAAC LTD Ltd besides other investments in quoted equity of shares of various companies and venture funds. The Company is exploring possibilities in manufacturing electrolyte products.
company has customers across the globe in North America, Europe, Africa, Asia, Australia, and South America. FY21 Exports stood at 24%.
Stock PE – 10 Compare to Industry PE – 28. ROE- 18 and ROCE- 28.
Price to Book – 1.57 and Intrinsic Value bellow CMP Indicating stock trading way bellow valuation. DEBT to Equity is .12 indicating the company has negligible debt.
Debtor Days have decreased from 43 to 39 indicating the company paying debt on time.
The company has delivered good profit growth of 25.20% CAGR over the last 5 years. EPS YOY up from 22 to 35. Even Quarter EPS is up from 12 to 15.
Net Profit – QOQ up from Rs 21Cr to Rs 28Cr and YOY up from Rs 28Cr to Rs 61Cr.
Sales – UP From Rs 271Cr to Rs 291Cr QOQ and From Rs 689Cr to Rs 980Cr YOY.
Technically trading way above 50DMA Placed at 350. Weekly and Monthly charts are very strong.
We are Optimistic on this stock for 3 to 4 Months with a price appreciation Target of Rs 600 which is Almost near 40% From CMP.