Sharekhan has given Buy recommendation for KPR Mill with a target price of Rs. 755 in its research report issued on Dec 17, 2021
Sharekhan’s research report on KPR Mill
Integrated business model, sustained export demand, and strong return profile makes it a best play in the textile space. New garment production capacity of 42 million garments is commissioned at Tamil Nadu; garment business revenue is expected to post a CAGR of 22% over FY2021-FY2024 with total capacity of 157 million garments. Capital allocation in high RoCE business (garment – 30%; ethanol – 22-23%) will help in improving RoCE to 31.9% in FY2024 from 25.2% in FY2021. Export demand remains strong in the US and Europe, while free trade agreement with European Union, retailers/large international players scouting for sustainable supply option in Asia, and US likely to put sanctions on countries such as Bangladesh are potential growth drivers for the company in the medium term.
We maintain Buy on KPR Mill Limited (KPR) with a revised PT of Rs. 755.