Scripscan:La Opala RG Ltd
cmp:90
Code:526947
Story:La Opala RG is into a very niche segment which has a total potential of just Rs 500 crore. For a country like India the company’s main business is into Opalware and Glassware where organized market share is just Rs 500 crore.I think larger players would definitely eye companies like Borosil as well as La Opala.Taking a call on La Opala RG, I think this is one stock which has a potential because of its brand Solitaire and Diva and into tableware products.The Company’s performance, the has been great over the last 4-5 quarters.Why this has happened? Because the fixed cost remains there and the company has been able to increase its top line which has been directly increasing their EPS. For the next fiscal I expect the company will again post the 20% - 25% mark in terms of growth. So on a longer term a company where the potential of the business is very huge is having a brand like Solitaire and Diva we better know, in fact housewives better know this particular company in the name of La Opala.I think there is lot of value that can be created in longer term.I feel the market capital to sales ratio can easily get tested to that one time mark where the company would post an EPS of close to Rs 15.I think the company definitely deserves a re-rating in terms of PE expansion of close to 8 times given my target of Rs 120 from next 12 months perspective.
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