KS OIL LTD.

KS Oils is the market leader in mustard oil market, with ~11% market share for FY09. It also has ~30% market share in branded mustard oil segment. By FY11, the company is expanding its mustard oil crushing capacity to ~3 times of its FY09 capacity. It has also acquired palm plantations in Indonesia. This will ensure backward integration which will further improve the margins. Also the trend of rising demand for agriculture produce coupled with shrinking supply is likely to last for at least a couple of years. Companies trading in agro commodities and having well established avenues of sourcing farm production are likely to reap huge benefits in the future.

Technically also KS Oils is looking attractive and is expected to give a breakout. The stock has been in a long term up trend. The stock has consolidated for about 3 months and has given a range breakout.

This stock moves slowly and consistently. So one needs to be patience and hold this stock for some time to earn good returns. A fresh breakout will also come in once it crosses 72.25 level.

First resistance can be seen at 72.25 after which the stock may rally up to75 & 84 levels. On the down side support may be seen at 64 after which it may dip down to 62 and 60 levels.

We recommend buying KS Oils Limited on dips, with a short term target price of 84. Long term investors may hold on to this stock for higher gains over the next couple of years.