ICICI Securities advises to buy this multibagger metal stock, bullish can be seen in 3 months

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The metals sector has gained momentum after a strong retracement in the past four months. In the metal sector, Vardhman Special Steel has outperformed its competitors. Brokerage house ICICI Securities said that currently, the stock has formed higher levels after seven consecutive weeks of decline due to rising volumes, indicating resumption of the primary trend.

Thus confirming the higher base above the 52 week EMA which has been held since June 2020. Hence, according to ICICI Securities, the metal offers a new entry opportunity with favorable risk reward setup, which has a buy rating, according to ICICI Securities. multibagger stock which comes with a target price of 302 and stop loss 233 with a time frame of about three months.

“The key point is that in the last five months, the stock has returned only 50% of the rally of the last four months ( 134-309). Slow pace of retracement reflects strong price structure,” the note highlighted.

Vardhman Special Steel is one of India’s leading steel bar producers for automotive applications. It has exclusive product offerings which include steel bars and rods and bright bars of various categories of special and alloy steel. It has been granted Environment Clearance (EC) for capacity expansion at its existing plant in Ludhiana.

Going forward, the company is focused towards improving capital efficiency and is targeting an EBITDA/Capital Employed of 25% by FY15. In addition, it plans to increase the share of exports, the brokerage note said.

“Over the period FY 2011-23E, we expect Vardhman Special Steel to grow at a topline of 25% CAGR, while EBITDA and PAT are expected to register CAGR (Compound Annual Growth Rate) growth of 35% and 64% respectively. have hope. Going forward, we have modeled EBITDA/tonne 10,000/tonne for both FY22E and FY23E years,” said ICICI Securities.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.

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