Contractors move steel rebar while working on the construction site of a residential building in New York, U.S. (Photographer: Victor J. Blue/Bloomberg)

Ventura Securities Initiates New Buy On Everest Industries

Brokerage Ventura Securities initiated coverage on Everest Industries Ltd., after the building product maker’s decision to shift focus to high-growth businesses such as board and panels and steel building, from its core roofing segment.

The broking firm initiated coverage with a ‘buy’ rating and a price target of Rs 712. This implies a potential upside of 35 percent from current levels.

Ventura expects the board and panel segment to be the key growth driver with a 22 percent compounded annual growth rate over the next three years, led by increased popularity of these products among customers and higher exports.

This will boost the company’s overall revenue from 15 percent in FY17 to 22 percent in FY20, Ventura said in its report.

The company’s steel building segment, which was hit by higher steel prices could also revive as new contract terms allow the company to pass on the higher prices to customers, thereby curtailing losses, the brokerage pointed out.

The roofing segment, which is Everest Industries’ core business (comprising around 50 percent of revenues) is expected to maintain its growth momentum, led by new product launches, government’s focus on affordable housing and application in warehouses and industries.