Scripscan:Sukhjit Starch & Chemicals Ltd
cmp:230
Code:524542
Story:SSCL's products find application across wide range of industries – food processing, paper, pharma, textiles etc. All these industries are adding capacities to meet growth in demand for their product which in turn will increase demand or company's products. Also demand for starch derivatives is rising in India, people have become quality conscious as it is used in food and pharma industry and are demanding better quality products. Maize based starch and its derivatives industry is a multi-billion dollar industry in US, while in India it is estimated to be only at Rs.17 billion and hence has tremendous potential to grow.Company is also now looking at exploiting the vast export market.Company's performance largely depends on availability and cost of raw material (mainly maize) which is subject to natural vagaries. This year the maize stock has been lower and hence prices of maize are higher but industry is in position to pass on increased raw material costs.At CMP of Rs.230, the share is trading at low single digit PE its expected forward earnings.Going ahead, company has a good growth potential in view of its strong track record, rising demand from user industries and capacity expansion.A buy at present levels which can give 20% return in an year's time.
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