Diwali Stock Picks for Samvat 2081: Nirmal Bang bets on Archean Chemical, LTTS, Jyoti Resins, others

About this update from Archean Chemical Industries Ltd.

Archean Chemicals | Despite a slowdown in bromine, the company but expects growth from bromine derivatives and newly acquired Oren Hydrocarbon. Delayed shipments affected Q1FY25 industrial salt performance, but recovery is expected. Sales from a second-grade SOP pilot plant are projected by Q3. Analysts expect topline growth of ~16% from FY24-27, with a target price of Rs 823/share. Fineotex Chemical | The company is poised for continued growth, with plans to expand capacity by 40K MTPA in two phases by FY25. It raised Rs 343 Cr to support its long-term expansion through organic and inorganic routes. Focused on sustainable products, Fineotex aims to maintain strong financials and healthy return ratios (ROCE 34.3%, ROE 29.9%), driving future growth and profitability. Five Star Business Finance | The company is well-positioned to capture growth in the underserved business loan market with its focus on secured loans to unbanked, self-employed individuals. With an average loan ticket size of Rs 3.5 Lakh, secured by self-occupied residential properties, and a robust 28% AUM CAGR expected over FY24-27E, Five Star has built a resilient model in a difficult segment. The company’s strong RoA (8%) and RoE (19%) for FY25E highlight its profitability potential. Analysts recommend a 'BUY' with a target of Rs 1,165, driven by higher return ratios and stable credit costs. Garware Hi-Tech Films (GHFL) | The company is poised to capture growth in India's expanding premium vehicle market by leveraging its strong network of 650+ OEM dealerships and 120+ channel partners. The increasing demand for premium protective films (PPF) driven by SUV, luxury car, and EV sales, as well as the China-plus-one strategy for shrink film manufacturing, positions GHFL for robust future growth. With ongoing capacity expansion of 300 LSF to meet demand, and a shift to higher-margin, value-added products (89% of revenue in FY24), the company's long-term prospects remain strong. The firm recommends a ‘BUY’ with a price target of Rs 4,848, offering a 20% upside. Jyoti Resins (JRAL) | The company is well-positioned for continued growth with its strong presence across 14 states in India and plans to expand into new regions, including New Delhi and UP. The company aims to further increase its market share by adding branches and distributors, while also enhancing storage capacity to support future gr...

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