I bought this stock in small quantity for long term holding around 2 years back. This virtually debt-free company has demonstrated strong financials and consistent profit increase over years, with increasing revenue from operations as well. However, currently I am looking at withdrawing from long term investment in the company for following reasons-
1) In Annual Report 2021-22, company talks about its heavy dependence on Cables and Wires (C&W) segment and its will to diversify its revenue. The company went into manufacturing of electrical products like fans, water heater, switch gears, bells, etc. However the customer feedback of their products is not good over websites likes Amazon, making us less confident about their plans and investments.
2) The C&W segment has heavy reliance on growth of telecom sector which has undoubtedly seen a lot of hit in past years. This year again the telecom sector has been in loss, although the loss has reduced significantly. But this still does not make us a lot confident about the growth of C&W segment.
My predicted price of the stock, on basis of P/E ratio and profit of the company stands at Rs. 475, an upside move of 27% from current level, with a resistance from 200-day moving average, but I am now looking for a swing trade sell-off at that level instead of a long term holding.
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