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કોરોનાવાયરસ હુમલો: ચાઇનાની હરીફાઈ હળવા કરવાથી 5 શેરો – વાયરસ અસર – આર્થિક ટાઇમ્સ

કોરોનાવાયરસ હુમલો: ચાઇનાની હરીફાઈ હળવા કરવાથી 5 શેરો – વાયરસ અસર – આર્થિક ટાઇમ્સ

Translating…

Virus Impact
Coronavirus outbreak in China has hit supply chains across the world and India is no exception. Indian importers of raw materials too are facing problems as China factories remain shut for some time now. But the development has also brought some relief for domestic companies who competes with finished Chinese goods. Santosh Meena, Senior Analyst at TradingBells believes that electronic equipment, organic chemicals, fertilisers and plastics are top import sectors which may benefit from fall China imports.

Here are five likely beneficiaries of the reduced imports:

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Dixon Technologies | CMP: Rs 4,636 |  1-year target: Rs 5,500

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Dixon Technologies | CMP: Rs 4,636 | 1-year target: Rs 5,500

Dixon Technologies is Trading Bells’ top pick in the electronic equipment segment. “Make in India” theme is the key reason for the stellar performance of Dixon Technologies. Synergy with marquee names like Samsung and Xiaomi is also a key factor for the vertical growth of the company. The cost of production is increasing in China resulting in companies moving from China to India and Dixon technologies is a major beneficiary of this phenomenon. The company has a strong order book for FY20-21. A cut in corporate tax is also boosting the bottom-line of the company.

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PI Industries | CMP : Rs 1,540 | 1-year target: Rs 1,920

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PI Industries | CMP : Rs 1,540 | 1-year target: Rs 1,920

PI Industries is leading players in the agrochemicals space which is getting major benefits from falling imports from China of fertilizer and chemical products. PI Industries is ready for multi-year growth in the CSM segment because of its enhanced R&D and supply scarcity related issues in China. Recently, it has witnessed big product wins and a significant surge in the deal pipeline. The company is in the mode of capacity expansion as management sees decent growth opportunities in the future.

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Supreme Industries | CMP : Rs 1,375 | 1-year target : Rs 1,660

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Supreme Industries | CMP : Rs 1,375 | 1-year target : Rs 1,660

Plastic products are the major beneficiaries of falling crude oil prices. Recently Supreme Industries has witnessed decent margin expansion amid a slow down in volume. The future growth outlook is bright as management expects volume to pick-up, led by a revival in demand from packaging and plastic piping segment. Pipes and fittings are likely to witness strong demand from the government’s ‘Nal se Jal’ Scheme. The company witnessed strong demand from that scheme in Bihar and Uttar Pradesh.

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IOL Chemical & Pharmaceutical | CMP: Rs 193 | 1-year target: Rs 255

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IOL Chemical & Pharmaceutical | CMP: Rs 193 | 1-year target: Rs 255

API and chemical business is shifting from China to India after pollution control measures are taken by the Chinese government. A recent fall in imports from China due to Coronavirus will lead to further growth in revenue and margin for Indian companies where IOLCP is a perfect play for both specialty chemical and API business. It has a profit growth of 34% CAGR for the last 5 years with a ROE of 36%. It has footprints in 56 countries and regularly supplying its high-quality products to major pharmaceutical players.

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UPL | CMP: Rs 576 | 1-year target: Rs 750

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UPL | CMP: Rs 576 | 1-year target: Rs 750

Fertilizer is the fourth largest commodity that is imported from China to India and a recent fall in import due to Coronavirus is going to help domestic fertilizer players in a big way where UPL is the leader of this segment. The fallout from China disruption due to coronavirus on the CPC industry is uncertain and is still being weighed, according to UPL. Management sees this as an opportunity to seize market share and grab the space being vacated by Chinese chemical companies. Management believes that the opportunity for UPL to emerge as an alternative supply source offsets the potential negative impact on the overall demand for CPC as a result of the problems in China.

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Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service

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