Time to re-visit Alok Industries. Last time I had recommended the stock at the price of 21 it went straight up and made a high of 35. Currently the stock is quoting very cheap at around 16.50. Book Value itself was 34.48 in March,2010 Source : http://www.moneycontrol.com/financials/alokindustries/balance-sheet/AI54 The current Book Value would be even more. Right now this stock is trading so cheap only because of the depressed market sentiment throughout the world markets.
It is currently trading at a ridiculously cheap PE ratio of just 3.4. The fair PE Ratio for such a company should not be less than 7. Which gives us a target of around 35-36 in the medium term. Not only is this stock trading at very low PE levels, technically also it looks ripe for a big bounce. The management is looking to reduce its debt levels and has aggressive growth plans. Alok Industries is a fully integrated textile company and is amongst India’s largest textile manufacturers. It has state of the art manufacturing facilities and boasts of the highest quality standards. Moreover, they have a land bank in Mumbai valued at 2000 crores plus. They are going to sell this land within this financial year and all this money will go into retiring its debt. The Promoters are using the opportunity presented by the weak global sentiment to increase their stake. A dividend has also been declared.
This stock is a potential multi-bagger for seasoned investors.
Company website : http://www.alokind.com/
Friday, August 19, 2011
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