Lahoti Overseas Ltd
(BSE Code: 531842) (CMP: Rs.19.45) (FV: Rs.2)
Lahoti Overseas Ltd (LOL), together with its subsidiaries, is engaged in the exports of cotton yarns and fabrics. It offers carded and combed ring spun yams of coarse and fine counts, ply yarns, special yarns and grey fabrics. It also generates, supplies, distributes and transmits wind and solar power. It primarily exports cotton yarn to Far East Asian countries i.e. South Korea, China, Japan, Hong Kong, Malaysia and Vietnam as well as to Gulf, Mediterranean, European, North and South American markets.
With an equity capital of Rs.5.85 crore and reserves of Rs.105.80 crore, LOL’s share book value works out to Rs.38.27 and its price:book value ratio stands at just 0.51x. The promoters hold 59.81% of the equity capital, which leaves 40.19% stake with the investing public.
During Q1FY19, LOL reported 307% higher PAT of Rs.5.21 crore on 56% higher sales of Rs.154.93 crore and an EPS of Rs.1.86. Investors must note that the standalone PAT reported for Q1FY19 was higher than the consolidated PAT of Rs.3.75 crore reported for FY18. It paid 10% dividend for FY18. Currently, the stock trades at a P/E of just 7.34x and is available at 39% discount from its 52-week high of Rs.31.9 recorded in November 2017. Based on its financial parameters, the stock looks quite attractive at the current level. Investors can buy this stock with a stop loss of Rs.14. On the upper side, it could zoom to Rs.30-32 in the medium-to-long term.