Omkar Speciality has target of Rs 110: PN Vijay Moneycontrol (23/07/2012)
Omkar Speciality Chemicals has target of Rs 110, says PN Vijay, Portfolio Manager.
Vijay told CNBC-TV18, "Omkar Speciality Chemicals is a midcap drug and the specialty chemical stock. The company concentrates on generics, APIs with emphasis in the veterinary space and specialty chemicals. What makes Omkar interesting is its aggressive inorganic growth route."
He further added, "Last quarter it acquired LASA Labs, which is a very interesting company, it has got a very good vertical in the veterinary API space and after this acquisition, Omkar Speciality would be able to access the virgin but lucrative veterinary markets of Europe, Australia and New Zealand but the margins are very high."
"During the quarter, Omkar also acquired Urudwa Chemicals on an asset purchase programme and then it invested about Rs 28 crore. This company is in specialty chemicals and it will grow the base business of the company substantially."
"Omkar’s last quarter profits were good, the topline grew by 32% and the bottomline by 38% and going forward we expect the company to have a turnover of about Rs 250 crore and an earnings per share of about Rs 11.5. Now the stock is trading around Rs 76 which makes it price earnings of about less than Rs 7 which is very attractive given the growth and the vertical and the sector it is."
"We are recommending the stock as a good midcap pick in the specialty chemicals space with the target of about Rs 110. The risks to this investment are that it is a basically a midcap stock and suffer from all the disabilities of investing in this terrain especially in volatile markets."