Stock recommendation: Rajesh Exports

Date:5/30/2008
World’s largest gold jewellery exporter Rajesh Exports stock is getting ready to explode after recent consolidation. Like Unitech, Bangalore based Rajesh Exports is also one of the most investor friendly company in India. Like Reliance, promoters go to any extent (good manipulation?) for the benefit of investors. Rajesh Exports is famous for producing world class jewellery at low cost in large amounts. This is the best stock for long term investors at this price range. Significant news: Rajesh Exports will announce results on June 18, 2008 which may act as trigger for short term bounce back.

Rajesh Exports stock price analysis:
CMP: 86.85.
P/E: 10
Face value: 1
1 year high-low: 169-55.

Rajesh Exports target price:

Short term target: Rs 110-115. This stock will give 30-35% returns within one month.

1-year target: Rs 150-160. Invest in it to get 80-100% annual returns in this counter over the next 2 years.

Why I am recommending Rajesh Exports? 1. World’s largest gold exporter at lowest cost.
2. Stock is currently trading at low valuations.
3. Investor friendly company with a rich history of dividends and bonuses.
4. It is expected to announce very good results on June 18 like other Jewellery companies.
5. Big order book.
6. It will rise after recent consolidation to give good returns to short term investors.
7. Foreign investors increased their stake by 10%.
8. There will be huge demand for low cost jewellery producers in the coming days.

Verdict: Rajesh Exports is the best stock pick for long term investors. This consistent dividend player will give 70-80% annual returns in FY09-10. This share is also a safe bet for even short term investors to get 25-30% returns within 30 days. Foreign investors are silently accumulating this “Multi Bagger”. FIIs bought this stock at around Rs 95 then why should you wait to grab this stock at Rs 86.

Chart courtesy: Bloomberg.