Asian Paints
Recommendation: Buy at Rs 347.30 CLSA emerging markets
CLSA is bullish on Asian Paints at Rs 347.30 and expects the stock to appreciate by 35 per cent to Rs 469 in the next twelve months. An impressive growth of 16 per cent in the first quarter indicates the continuation of buoyancy in demand for paints witnessed in the fourth quarter of the last fiscal.
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Lower cost of raw materials, a better sales mix and initiatives to improve capital efficiency should lead to a further expansion in margins. Margins improved by 178 basis points in the previous quarter. The stock is trading around 16x FY03 estimated earnings of Rs 21.5 per share.
Ballarpur Industries
Recommendation: Buy at Rs 55
Inquire India Research
Inquire India Research recommends a buy on Ballarpur Industries at Rs 55, with a 12-month price target of Rs 110. Being the largest player in writing and printing papers, the company is expected to benefit immensely from the price hike of Rs 500 per tonne in May. Similar increases in the price of paper are expected in the next few months. Moreover, with installed capacity predicted to rise by one lakh tonne in the next three years, Ballarpur