Manaksia Limited (formerly Hindustan Seals, BSE: 532932, NSE: MANAKSIA) is a multi-division group, with 15 manufacturing plants in India and three abroad: two in Nigeria and one in Ghana. The company also has subsidiaries in Ghana (Dynatech Industries Ghana Limited) and Dubai (Euro-Asian Ventures FZE). This company is into hot and cold rolling of aluminum and steel and they produce various metal packaging products.
The company has now diversified into the production of aluminum rolled products, secondary specification aluminum alloys and galvanized steel and this is where they plan to focus in the future to achieve economies of scale and reduce raw material costs. Manaksia claims to be the largest player in secondary aluminum rolling in India. The company's metal packaging products include crowns, roll-on pilfer-proof closures, expanded polyethylene liners as well as push-open and other metal containers. In the FMCG segment, the company is a dependable mosquito repellents outsourcing destination for the Mortein (Reckitt Benckiser India Limited) and Maxo (Jyothy Laboratories) brands.
The global outlook for metal industry and packaging has lot of promise, especially from the perspective of growth in demand in several countries (especially construction, automobile and consumer goods) and because of favorable government regulations.
I think they can end the year with an EPS close to 20 and keeping a very modest P/E of around 14, the target price works out to 110. Buy around 78-79 for a 6-8 month target of 110 (+40%). If global economy improves over the next 12 months, as I think it will, Manaksia can even cross 135.
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