Its an low risk moderate return type of stock today, The over supply scenario globally expected to last for 1-2 years, bad thing about this recessions was globally central banks bailed out everyone so, demand is gone ( real economy is in pain) but supply has not diminished ( not many mining companies went bankrupt)
but anyways if one expects demand to catch up in 3-5 years you can expected to make 10-15% kind of CAGR in 5 years.
My worry is there are other ways to make these returns ( bond markets - many companies at 10%) but after 3-5 years when you sell will you have the opportunities you have today in the market ? Will you have the companies like Edelweiss , SIB trading at 10-15% YTM in bond markets ( of course risks are there) but we may have markets which discounting all the risks 5 years from now.
In short cyclicals my problem is it’s another headache to time selling and then find our new thing. ( there is additional opportunity cost involved here) .
i want at least 4-5 x from cyclicals today not 2x (in 5 years), realistically we should not expect it to trade Rs 150- 200, i think Rs 60 is a good case scenario as supply side of industry is not affected ( bailed out by central banks).
Thoughts invited.