The year 2021 has delivered a huge number of multibagger stocks. Gujarat Fluorochemicals Limited (GFL) stock has delivered a stellar return to its investors as it has zoomed over 300 per cent in the last 12 months.
In the past one year, the share price jumped from Rs 590.5 to Rs 2,539.95 mark -- logging around 330 per cent return in this period.
An amount of Rs 5 lakh invested in this multibagger stock a year ago would have turned into Rs 21.5 lakh today.
With a market capitalisation of more than Rs 27,000 crore, the shares stand higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
The large-cap stock rose 10 per cent to hit an all-time high of Rs 2,539.95 on the Bombay Stock Exchange (BSE) on Friday. The stock surged after the brokerage house ICICI Securities initiated coverage on the stock with a 'BUY' rating and target price of Rs 3,086 per share.
"GFL is in a sweet spot with its presence in fluoropolymers, demand for which is increasingly driven by the new-age verticals of battery, solar panel and green hydrogen. GFL is in the process of expanding its capacity in fluoropolymers, which provides visibility on growth during our forecast period (FY21-FY24E)," the brokerage firm said.
It further added that GFL is also expanding into other fluorine derivatives used in the new-age verticals, which expands the company’s addressable market and provides a vista of sustained growth. The company has laid out a bold capex plan of Rs 2500 crore over the next three years.
It is likely to see its earnings grow at 45.9 per cent CAGR over FY21-FY24E (on a low base though), and RoCE (post-tax) improve from 6.7 to 18 per cent over the same period.
Despite the strong earnings outlook, GFL is trading at a reasonable P/E multiple of 20x FY24 vs 42.1x for Navin Fluorine and 27.5x for SRF, it said.
According to a recent report by KR Choksey, GFL is in the process of expanding its existing as well as adding new capacities in Specialty Chemicals and New Fluoropolymers.
The research firm expects the company to keep the momentum of its financial performance intact, aided by larger operational cash flows and working capital efficiency.
The company reported a net profit of Rs 207.15 crore for the quarter ended September 2021 as against a net profit of Rs 79.06 crore in the year-ago quarter.
Revenue from operations rose 56 per cent to Rs 964.01 crore during the quarter. The earning per share (EPS) of the company increased to Rs 18.66 in September 2021 from Rs 7.21 in September 2020.
According to MarketsMojo, the company has declared positive results for the last 3 consecutive quarters and has a low Debt to Equity ratio (avg) at 0.28 times.
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