Indian Stock Picks

NSE: Archies

BSE: ARGG

CMP: Rs. 132.20

Recommended Price: Rs. 126.00

Price target: Rs. 145.00

Stop Loss: Rs. 118.00

About the company:

Archies Limited retails Greeting Cards, Stationery, and Gifts primarily in India. It operates stores primarily under the ‘Archies Galleries’ brand name, as well as operates Stupid Cupid stores that offers a range of fashion jewelry and accessories. The company also engages in the online retail of its products through, archiesonline.com. As of March 31, 2007, it owned and franchised 475 stores, in India and internationally. The company is based in New Delhi, India.

Financials:

Company’s aggressive pricing and strong marketing policies have led to the company’s total revenues increasing by an average of 16% over the last 3 yrs. This has also affected the operating margins and profits well, resulting in a rise by about 16% YoY.

The Company’s strong point lies in its strong inventory management which reduces its operating costs significantly when compared to the other companies in the same sector/business.

Verdict:

The stock has been an underperformer and shall remain so for some time for now. The stock can be picked up at a price of about Rs. 126 for a decent return in the near mid term. The stock holds the potential of touching 146 levels and above in a period of 2-3 months.