BUY GHCL STOCK AT 59 TGT 75 SL 52 - VERY SHORT TERM
GHCL India is one of the largest manufacturers of Soda Ash in India, with an installed production capacity of 8.50 lakh MTPA, equally divided for producing Light (used in detergent industry) and Dense (used in Glass industry) Soda Ash. GHCL's Soda Ash is also widely used in the manufacture of sodium salts widely used in food products, textiles, paper, metallurgical industries and desalination plants.
Some of GHCL’s major soda ash consumers include clients like Hindustan Unilever Limited.
Attractive point for GHCL is that EPS growth over the next three years between FY14 to FY16 is expected to average 20% plus YoY but valuation multilpes look quite low between 5x on FY15 and 4x on FY16E. More noteworthy is that GHCL is one of those stocks which has seen almost 90% erosion in prices from its peak in Dec 2007. At the current price GHCL enjoys a market cap of Rs 578 crs as compared to a balance sheet size of Rs 3014 crs as on Mar 2014 and a Net worth of Rs 587 crs.
It is best to consider that, i have vested interest in this stock as i have invested !!!