Shankara Building hits new high; stock rallies 58% in two weeks

The stock hit a new high of Rs 2,346, rallied 58% in the past two weeks from Rs 1,484 on November 21, as compared to 2% decline in Sensex

Last Updated : Dec 05 2017 | 11:22 AM IST

Shares of Shankara Building Products continued their upward journey, hitting a new high of Rs 2,346, up 6% on the BSE in an otherwise subdued market.

The stock has rallied 58% in the past two weeks from Rs 1,484 on November 21, as compared to 2% decline in the S&P BSE Sensex.

On Monday, the company said its board will meet on Tuesday, December 12, 2017 to consider and review working capital requirements and realignment of working capital limits and other matters.

Last week, it had opened two additional stores under the “Shankara Buildpro” brand in Vijayawada and Bangalore.

Since listing on April 5, 2017, the stock has zoomed 266% from Rs 633 against 9.4% rise in the benchmark index. Shankara Building Products had raised Rs 350 crore through initial public offer (IPO), by issuing shares at price of Rs 460 per share.

According to Emkay Global Financial Services, Shankara is a good proxy to play on the growing demand for organized home improvement and building material space. Its retail business has an excellent operating matrix backed by clear focus on cost.

Lowering of GST rates and fulfilling pent-up demand is likely to drive growth in the coming quarters. As the focus remains on the Retail business, the company plans on adding 15-20 stores each year and expects the Retail contribution to sales to touch 70% in the next 3-4 years.

“Store additions, upgradation to new format stores (40 stores converted and 60 stores pending), new categories and demand uptick is expected to drive consolidated revenues by 12% CAGR FY17-20E,” the brokerage firm in Q2FY18 results update. However, the stock is trading above its target price of Rs 1,497.

At 10:56 AM; the stock was trading 6% higher at Rs 2,339 on the BSE as compared to 0.27% decline in the Sensex. A combined 664,963 shares have changed hands on the counter on the NSE and BSE so far.