Small Cap Stock To Buy For 30% Upside, Gave Over 350% Return In 3 Yrs, Declares Rs. 3/Share Dividend

Broking firm Prabhudas Lilladher has a Buy on S Chand and Company Ltd. for a target price of Rs 257/share. The broking firm claims a potential upside of up to 30% from its current level, considering the given target price. It is a publishing sector small-cap stock. Its market valuation is Rs. 697.15 crore.

Dividend

The Board of Directors of S Chand and Company Ltd. in a Board held on Tuesday, May 30, 2023, recommended a final Dividend of Rs 3 for the financial year 2022-23.

"Recommended a final dividend of Rs. 3/- per share to the equity shareholders of the Company for the financial year ended March 31, 2023," the company said in an exchange filing.

Re-rating hinges on NCF roll out, Buy for a Target Price of Rs. 257/share

Prabhudas Lilladher said, "Though our FY24E EPS estimates are broadly intact, we increase our FY25E EPS estimates by 6% as full benefits of NEP implementation and benign paper prices will accrue over time. S Chand & Company (S Chand) reported decent performance in FY23 from working capital (188 days; best ever) and leverage (net debt of just Rs60mn) standpoint, but top-line was a miss at Rs6,103mn (management guidance of Rs6,400-6,500mn). For FY24E, management has guided top-line of Rs7,200-7,500mn with EBITDA margin of 16-18% backed by price hike, RM stabilization and increased volumes that would come from NCF roll-out."

It added, "We expect sales/EBITDA CAGR of 13%/23% over FY23-FY25E and maintain 'BUY' on the stock with a revised TP of Rs257 (12x FY25E EPS). Volatile RM prices and delay in NCF roll-out is a key risk to our call."

Stock Outlook

The share price of S Chand & Company is currently trading at Rs. 198/share, up 2.99% from its previous close of Rs. 192.25/share. Its 52 week high is Rs. 235/share and 52 week low is Rs. 93/share, respectively. The stock has fallen 5.37% in the past 1 week and 7.1% in the past 1 month, respectively. It gave 73.23% positive return in the past 1 year. In the past 3 years, it has given 352.85% multibagger return. In the past 5 years, it has given 46.17% negative return.

Disclaimer - The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.