What is your target on Alok Industries?
A: Alok Industries is an exceptional company in the textile segment. In this quarter, not so many textile companies have come out with the kind of numbers which Alok has delivered. They have come out with very good topline growth as well as a 41% bottomline growth. They have also maintain an EBITDA margin.
Besides this, there is one more development in Alok Industries that they have a 100% subsidiary called Alok Infrastructure & Projects Ltd. The valuation of this subsidiary is coming to around Rs 3,000 crore. The company is also planning to divest around 20% stake in this subsidiary in the next financial year. So it may fetch them around Rs 600 crore.
So, by the sum of the parts method, on the fully diluted basis, the valuation of this Alok Infra Projects is almost Rs 150 in the current valuation of Alok Industries. Hence, I find a lot of value hidden in Alok Industries. Those investors who will hold on to the stock for almost a year are going to get very good returns.
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