Technical and Fundamental support it Fundamental
Slightly pricy pick with FY27E P/E around 40x but EPS until FY27E from FY24 is expected to grow at around 30% CAGR, along with that they have the 2nd most market share in India's branded stationery and art products, holding roughly 12%. ITC is at no.1 with 20% market share. Hindustan Pencil is no.3 with 8% market share. Based on a statista report, the industry value is expected to go from 385bn INR in 2023 to 716bn INR in 2028, implying a 13% annual growth rate, driven by higher literacy rate and urbanization. Now the stock has taken a dip mainly because one of the promotors (FILS - Italian stationery company) has dumped 5% of the stock in the name of further liquidity for more investors, which may or may not be true, but regardless this opens up a great opportunity to buy the stock. Axis recently also named this stock as a top pick for 2025, pricing the stock Rs 3120 INR, implying roughly 20%+ upside. Their asset mgmt arm also bought 7lakh+ shares from FILS at 2879 (which could be why they published the report), which is roughly 10% higher than the price now. Along with them 3 well named funds, being SBI, Nippon, and Tata hold a 14% stake in the stock.
Technical
Historically buying has been seeing at this level and their RSI is at the lowest since the stocks IPO, potentially leading to mean reversion coming in effect.
Personally, I am trying to get 13-15% upside as I havent studied the fundamentals very well, however I think that it is a good time to trade this stock, so its more of a trade than an investment.
THIS IS NOT INVESTMENT ADVICE. PLEASE DO YOUR OWN RESEARCH
