Today, we bring to your attention a remarkable company, “Eco Recycling Ltd“, which stands as India’s number one e-waste management enterprise.
This company has expanded its operations across more than 120 countries worldwide and possesses an impressive e-waste recycling capacity of 25 million tones annually.
It also offers a user-friendly app called “Book My Junk,” through which customers can conveniently sell their e-waste from home.
Eco Recycling Ltd Stock Performance and Returns
If we examine the stock performance of Eco Recycling Ltd, it has delivered outstanding returns over the years.
In the last year alone, the stock surged by 463%, while over the past three years, it recorded a growth of 1197%.
The most impressive is its five-year return, where the stock appreciated by a staggering 2981%.
Future Potential and Target Price
As of August 23, 2024, Eco Recycling Ltd’s shares are listed on the Bombay Stock Exchange (BSE) and are trading at ₹1001.
Looking ahead, the stock holds tremendous potential to offer impressive returns.
Analysts believe that in the coming year, the stock could easily cross ₹2,000, with a potential to reach ₹3,000 within the next two years, given its strong fundamentals and ongoing business expansion.
Fundamental Analysis of Eco Recycling Ltd
Eco Recycling Ltd boasts strong financials, making it a leader in its sector. Let’s delve into the company’s key fundamentals:
The company has a market capitalization of ₹1,523 crores, and the face value of its shares is ₹10.
As a market leader, the company is heavily invested in expansion plans that could further solidify its dominance in the e-waste segment.
Return on Equity (ROE)
Return on Equity (ROE) measures how efficiently a company generates profit from its equity.
An ROE above 20% is considered excellent, and Eco Recycling Ltd boasts an impressive ROE of 26.98%, showcasing its profitability and efficiency.
Return on Capital Employed (ROCE)
Return on Capital Employed (ROCE) indicates the profitability relative to the total capital invested in the business.
With a ROCE of 30.66%, Eco Recycling Ltd surpasses the 10% benchmark typically considered healthy for Indian companies.
This reflects the company’s ability to generate substantial returns from its capital.
Return on Assets (ROA)
Return on Assets (ROA) measures how effectively a company utilizes its assets to generate profit.
Eco Recycling Ltd’s ROA stands at 22.60%, significantly above the standard 5% threshold, marking it as a highly efficient operation.
Debt-to-Equity Ratio
The debt-to-equity ratio is a crucial indicator of a company’s financial health, reflecting its reliance on borrowed funds.
A ratio below 1 is considered good, and Eco Recycling Ltd’s ratio of just 0.02% indicates minimal debt, suggesting that the company can comfortably manage its obligations.
Compound Annual Growth Rate (CAGR)
The Compound Annual Growth Rate (CAGR) highlights the company’s growth trajectory over the years.
Over the last three years, Eco Recycling Ltd’s sales have grown at a CAGR of 48.69%, while profits have surged at an astounding 101.89% CAGR.
These figures underscore the company’s rapid growth and robust business model.
Promoters’ Holding
The shareholding pattern is a key factor in assessing a company’s stability and management confidence.
In the case of Eco Recycling Ltd, the promoters hold 73.35% of the company’s shares, indicating a strong commitment and belief in the company’s future prospects.
Operating Profit Margin (OPM)
Operating Profit Margin (OPM) is another vital metric that reveals a company’s profitability. OPM is calculated as:
OPM = (Operating Profit/Revenue) * 100%
For Indian companies, an OPM above 20% is considered outstanding.
Eco Recycling Ltd’s OPM stands at an impressive 59%, reflecting its efficient operations and substantial profit margins.
Shareholding Pattern as of June 2024
The company’s shareholding as of June 2024 is as follows:
Promoters: 73.35%
Public: 25.49%
Foreign Institutional Investors (FII): 1.17%
Target Price and Conclusion
As of August 23, 2024, Eco Recycling Ltd is trading at around ₹1001.
Given its strong financials and promising expansion plans, the stock is projected to easily surpass ₹2,000 within a year and could even touch ₹3,000 in two years.
My Perspective
In my view, Eco Recycling Ltd is a fundamentally strong company with significant growth potential.
For investors with a long-term outlook, this stock could be a lucrative investment, potentially doubling in value over the next year.
Disclaimer
The suggestions provided here are based on careful analysis, but there may still be room for error. It’s essential to consult your financial advisor before making any investment decisions.
Note: Most of the data referenced is based on March 2024 figures. This is not investment advice. The stock market is subject to risks. Always seek expert advice before investing.
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