ICICIdirect has selected Himatsingka Seide as techno-funda pick. It recommends buying the stock in the range of Rs 92-95 for target of Rs 114 for duration of 6 months. The broking house gave the following technical and fundamental outlook:
Commenting on technical analysis, ICICIdirect said, ''The stock has been in a secular uptrend since August 2013 and continues to stride northwards in a rising peaks and troughs fashion on the long term charts. It hit an all-time high of Rs 106 in September 2014 and, thereafter, entered a corrective phase over 10 months. The entire corrective price action is enclosed in a falling channel. During Monday's session, the stock registered a strong breakout above the falling channel thus signaling a reversal of the recent corrective decline. It offers a fresh entry opportunity to ride the next up move in the stock. Extended time wise correction and limited price correction is the primary trait of structural bull market and augurs well for the stock going forward.
We believe the stock is set for its next up leg within the larger up trend and test 114 levels in the short term. The 123.6% retracement of the preceding decline from Rs 106 to Rs 74 projects upside towards 114 levels, thus offering a favourable reward-risk equation.''
While on fundamental outlook, the broking firm said, ''Global textile & apparel trade stood at USD 708 billion of which the global home textile market was valued at USD 70-USD 75 billion. The US constitutes an estimated 40% of the global home textile market and is valued at USD 28-USD 30 billion. Apart from licensed brands, Calvin Klein Home, Barbara Barry, Esprit & Waverly, etc. the company caters to private label programmes of major retailers like Costco, Bed bath and Beyond, Sams Club, etc. With higher home sales and revival of the US economy, we believe HSL would be a major beneficiary of the improving consumer sentiment and US economic revival.
The company expects its retail and distribution revenues to increase from Rs 6 billion in FY15 to Rs 12 billion by FY20. Further, on the back of better realisation and improved financials, we expect an improvement in return ratios.''
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