Buy Shankara Building Products; target of Rs 2340: ICICI Direct
ICICI Direct’s research report on Shankara Building Products
Shankara Building Products (SBPL) recently opened its 123 r d store under its ‘ Shankara BuildPro’ brand in Bangalore . The store admeasures ~ 8399sqft and houses a diverse basket of product offerings. With this store, the company has opened its 17th store in YTDFY18 and is in line with its target of opening 15 – 20 new stores every year. Over the next four to five years, the company aims to almost double its store count to 200 stores vs. 106 in FY17. Additionally, the company also aims to upgrade its old stores. Currently, the company has already upgraded 40 old stores and aims to upgrade the remaining 60 stores over the next two years.
We expect RoCE to improve 680 bps at 29.7% in FY17 – 20E. Hence, we maintain our BUY recommendation on the stock with an SOTP based target price of RS 2340 /share.
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