IIFL Securities's Stock Pick Today: Buy Sumitomo Chem India with Target Rs 535

IIFL Securities issued a "buy" recommendation for Sumitomo Chemical India on July 22, with a target price of Rs 535. The current market price for the stock is Rs 519.5. This recommendation is based on the company's strong financial performance and its positive outlook for the future. Sumitomo Chemical India is a leading manufacturer of chemicals and plastics, and it has a strong presence in the Indian market. The company has been reporting consistent growth in recent quarters, and it is expected to continue to do well in the future.

About Sumitomo Chem India:

Sumitomo Chemical India Limited (SCIL), incorporated in 1962, is a subsidiary of Sumitomo Chemical Company Limited, Japan. The company operates in four segments: Petrochemicals, Fertilizers, Crop Protection Chemicals, and Fine Chemicals. SCIL's product portfolio includes petrochemicals (aromatics, olefins, polymers), fertilizers (urea, NPK), crop protection chemicals (herbicides, insecticides, fungicides), and fine chemicals (surfactants, antioxidants). The company has manufacturing facilities in Gujarat, Maharashtra, and Tamil Nadu. SCIL has a strong presence in the Indian market and exports its products to over 50 countries. The company's revenue for the year ended March 2023 was Rs 12,900 crore.

52 Week Price Trend:

Sumitomo Chem India is currently trading at Rs 519.5, representing a 22% increase from its 52-week low of Rs 370. However, the stock remains below its 52-week high of Rs 466.95, suggesting that there is still room for growth. The company has a strong financial position and a track record of consistent growth, making it an attractive investment option for both short-term and long-term investors.

Stratzy's MOST Analysis:

Stratzy's MOST framework has given SUMICHEM a rating of AA-, indicating medium fundamental risks. This assessment considers the company's management, outlook, safety, and trend. AA- is a favorable rating within Stratzy's grading system, indicating a solid understanding of fundamental risks and a balanced evaluation across all four pillars. This suggests that SUMICHEM has a relatively strong management team, positive industry outlook, robust safety measures, and a favorable market trend.

Company's Fundamentals:

Sumitomo Chem India (NSE: SUMICHEM) is currently trading at a Stock PE of 57.68, indicating that investors are willing to pay Rs. 57.68 for each rupee of earnings. The PB Ratio of 7.61 suggests that the company's market value is 7.61 times its book value, indicating a premium valuation. However, the Dividend Yield of only 0.31% implies that investors are not receiving a substantial return on their investment in terms of dividends. These metrics provide investors with insights into the company's valuation, profitability, and dividend payout policy.

Fundamental and Technical information provided in this blog were last updated on 20 Jul, 2024

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