Investment Idea - Nahar Spinning - 12-18 months

Investment Opportunity: Nahar Spinning 

Industry: Textile-Product

Horizon: 12 to 18 months

(NSE Symbol: NAHARSPING | BSE Code: 500296)

 Last closing price (05-06-2014): Rs.142 (+2.40 ­  1.72%) (Face Value: Rs.5)

Price Background: The all-time high for the script which is Rs.313.50 was made on 15.5.2006 and all-time low of Rs. 17.50 was made on 26.11.2008. Low for year 2013 was Rs. 64.05 which was made on 7-8-2013. The low for year 2014 (as on date) is Rs.91.35 made on 18-2-2014.

Fundamental: The Company has posted excellent financial result for FY 2013-14 and net profit has doubled from the last year FY 2012-13 of Rs.78.39 crores to Rs.145.31. The EPS for current year is Rs.40.27 against 21.71 for the year 2012-13.The sales for the current financial year is at 2200.07 crores against 1961.28 for the year 2012-13 and the book value of the share is 212.66. The company has declared dividend of 20%. At the current rate, the stock is at very low P/E of 3.53 and available below its intrinsic  value. Therefore, I feel that the stock has very good potential to move up.

Technical: Technically the stock is superbly poised for a big up move.

Recommendation: I expect a return of 75-100 % in 12-18 months. I therefore recommend investing at least 40% of the marked fund for the script at the current level and then suggest buying on dips. Kindly be alert if the stock price goes below 120 and stays at that level. Please get out of the stock if price closes below 112. 

P.S. Kindly note that make your cost your stop loss in favorable trade and then trail it as the price of the stock moves up to gain maximum profit.

Note:

1.    Price stated here is of spot market

2.   Recommendations are valid till the stop loss is triggered

3.   In favorable trade trail your stop-losses for maximum gain and capital protection