Weekly Shorts : Analysis of Associated Alcohol

Associated Alcohol and Breweries is a small cap company in the alcohol sector with a market cap of 898 crores.

With a current P/E of 15.5 and no debt, it is a highly undervalued company.

Apart from this, the government’s has preponed its plan to achieve an ethanol blending target of 20% from 2030 to 2025, which is likely to boost the production and orders for ethanol produced by this company.

Associated alcohol and breweries is planning to double its capacity by 2022 and has planned a very ambitious expansion strategy, which can significantly cause its revenue and profits to rise and almost double its share price in the near future.

TARGET PRICE : INR 600+ (Current price : INR 497) ; Long term target price of 2 years : approx INR 1000

OUR STANCE : BUY

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