Buy Indo Count Industries, target price Rs 164: Arihant Capital Markets

has buy call on with a target price of Rs 164. The current market price of Indo Count Industries. is Rs 133.8.
Indo Count Industries Ltd., incorporated in the year 1988, is a Small Cap company (having a market cap of Rs 2620.48 Crore) operating in Textiles sector.
Indo Count Industries Ltd. key Products/Revenue Segments include Textile Goods, Export Incentives for the year ending 31-Mar-2021.

Financials

For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 849.03 Crore, up 17.59 % from last quarter. Total Income of Rs 722.02 Crore and up 10.70% from last year same quarter. Total Income of Rs 766.95 Crore. Company has reported net profit after tax of Rs 66.97 Crore in latest quarter.
The company’s top management includes Mr. Anil Kumar Jain, Mr. Siddharth Mehta, Dr. Sanjay Kumar Panda, Dr.(Mrs.) Vaijayanti Pandit, Mr. Sushil Kumar Jiwarajka, Mr. Prem Malik, Mr. Dilip J Thakkar, Mr.Kailash R Lalpuria, Mr.Mohit Anilkumar Jain, Mr.Kamal Mitra. Company has Suresh Kumar Mittal & Co. as its auditors. As on 30-06-2022, the company has a total of 20 Crore shares outstanding.

Investment Rationale

The brokerage is of the view that on a full year basis, the company’s H2 will be similar to H1 in terms of margins though top line performance may pick up in Q4FY23- Q1FY24 owing to holiday demand. Considering the shrinking wallets, high inflation, rising interest rates, high (but less volatile) cotton prices, and dampening consumer demand, Arihant Capital recommends that investors reduce their holdings in the stock. The brokerage assigns a TP of INR 164 (upside of 22.2%) valued at a P/E of 10x based on the FY24E EPS of INR 16.4.

Promoter/FII Holdings

Promoters held 58.94 per cent stake in the company as of 30-September-2022, while FIIs owned 9.28 per cent, DIIs 0.09 per cent.
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