Month: July 2021

PGIM India Midcap Opportunities Fund Direct-Growth

This fund was launched in November 2013 by PGIM Mutual Fund. PGIM India Midcap Opportunities Fund Direct-Growth returns in the last year were 100.20 per cent, according to Value Research. It has returned an average of 20.17 per cent per year since its inception. The financial, engineering, services, chemicals, and technology sectors account for the majority of the fund’s asset allocation.

ICICI Bank Ltd., NIIT Technologies Ltd., MindTree Ltd., Aarti Industries Ltd., and Federal Bank Ltd. are the fund’s top five holdings. If compared to other mid-cap funds, the fund has an expense ratio of 0.41 per cent, which is quite reasonable. As of 06 July 2021, the NAV of the fund is Rs 40.38 and currently, the fund has an asset under management (AUM) of Rs 1,615 Cr. One can start SIP in this fund with a minimum monthly contribution of Rs 1000. An exit load of 0.5% would be charged if units in excess of 10% of the deposit redeemed within 90 days of the initial date.

Axis Midcap Fund Direct-Growth

In July 2013, this fund was initiated by Axis Mutual Fund. Axis Midcap Direct Plan-Growth has delivered decent returns of 63.25 per cent in the last 1-year. It has returned an average of 20.75 per cent per year since its inception, according to the data of Value Research. The fund has an asset allocation across the Financial, Chemicals, Technology, Consumer Durables, and Services sectors. Cholamandalam Investment & Finance Co. Ltd., Voltas Ltd., Astral Poly Technik Ltd., PI Industries Ltd., and NIIT Technologies Ltd. are the fund’s top five holdings.

The fund’s expense ratio is 0.52 per cent, which is significantly lower than other funds in the same category. The fund’s NAV is Rs 68.55 as of 06 July 2021, and it currently has an asset under management (AUM) of Rs 11,834 Cr. With a minimum monthly investment of Rs 500, one can start a SIP in this fund. If units worth more than 10% of the investment are redeemed within one year of the initial date, an exit load of 1% would be levied by the fund.

Kotak Emerging Equity Fund Direct-Growth

This mid-cap fund was launched by the fund house Kotak Mutual Fund in January 2013. The 1-year returns for Kotak Emerging Equity Fund Direct-Growth are 81.42 per cent. According to Value Research data, it has provided an average yearly return of 21.28 per cent since its inception. The fund has a 0.61 per cent expense ratio and has its asset allocation across the Chemicals, Engineering, Financial, Construction, and Healthcare sectors.

Supreme Industries Ltd., Coromandel International Ltd., Persistent Systems Ltd., The Ramco Cements Ltd., and FAG Bearings India Ltd. are the fund’s top five holdings. Currently, the fund has an Asset Under Management (AUM) of Rs 12,463 Cr and the latest NAV as of July 6, 2021 is Rs 72.56. A SIP in this fund can be started with a minimum monthly investment of Rs 1000. The fund would charge an exit load of 1% if units worth more than 10% of the investment are redeemed within one year of the inception date.

Edelweiss Midcap Fund Direct Plan-Growth

This mid-cap fund was launched by the fund house Edelweiss Mutual Fund in January 2013. According to the data of Value Research, Edelweiss Mid Cap Direct Plan-Growth has generated a return of 86.62% in the last 1-year. It has returned an average of 22.02 per cent per year since its inception. Shriram Transport Finance Co. Ltd., Mphasis Ltd., Jindal Steel & Power Ltd., Odisha Cement Ltd., and JK Cement Ltd. are the fund’s top five holdings.

The fund has a 0.69 per cent expense ratio and a current NAV of Rs 50.31 as of July 6, 2021. The fund has its equity allocation across the Financial, Construction, Chemicals, Engineering, Healthcare sectors. The fund currently has an asset under management (AUM) of Rs 1,359 Cr. With Rs 500 one can start SIP in this fund and the fund would charge an exit load of 1% if units are redeemed within 1 year of inception.

Best Performing Equity Mid Cap Funds In 2021

Here are the best-performing equity mid-cap funds in 2021 based on rating and historical returns.

Should you invest?

For better knowledge for our readers by keeping their financial planning in mind, we always provide a clear view of the average returns of mutual funds. According to the historical returns of equity mid-cap funds, they have generated an average SIP-return of 21.16% in the last 5 years. This return is much lower than the 5-year average SIP return of the best-performing large-cap funds, which means that based on the last 5-year returns, they have outperformed large-cap funds by a huge number.

But this data should not be your only consideration to bet. Investors should and should keep in mind that during the market downturn, mid-cap funds and small-cap funds suffer the most, which means that an investor with a high-risk appetite having an investment horizon of 5-years or more can invest in equity-mid cap funds. But a new investor or an investor with low to moderate risk tolerance can invest or diversify their portfolio with best-performing debt mutual funds, large-cap funds, or arbitrage funds.

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advise to buy or sell stocks, gold, currency or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and authors do not accept culpability for losses and/or damages arising based on information in GoodReturns.in

Finolex Cables

The brokerage has placed a “buy” on the shares of Finolex Cables with a price target of Rs 623 on the stock, as against the current market price of Rs 521, which as an upside of almost 20% from the current levels.

“Finolex cables reported a strong quarter, driven by strong revenue growth along with stable y-o-y operating profit margins. Its standalone revenue grew by 41% y-o-y to Rs. 921.4 crore (better than estimates), led by higher volume growth across product categories.

We expect strong performance in FY2022 as the cables segment saw infrastructure investments; the communication cables segment has already seen good tendering in First quarter of FY2022 and scaling up of its FMEG business with improving demand and strong dealer network. The company’s healthy operating cash flow generation, tight working capital management (policy of advance payments from dealers), and limited capex are expected to further build upon its cash reserves.

We retain our Buy rating on Finolex Cables with a revised target price of Rs 623, considering improvement in distribution efforts, which has led to pick up in volumes,” the brokerage has said.

Trent

Sharekhan has also recommended to buy the stock of Trent. The company is a renowned retailer and operates Westside, Star Bazaar, a hypermarket chain and Landmark a family entertainment format. The company has set a price target of Rs 1,018 on the stock as against the current market price of Rs 901 on Trent.

“Trent is among India’s strong branded retail players with a robust balance sheet, stable cash flows and one of the highest utilisation rates per store. Innovation in product portfolio, scaling up of supply chain, 100% contribution from own brands, aggressive store expansions and leveraging of digital presence will be near-term growth drivers. The stock is currently trading at 36 times its FY2023E EV/EBITDA. We maintain a Buy rating with a revised SOTP-based price target of Rs. 1,018,” Sharekhan has said in its report.

Gland Pharma

Gland Pharma is another stock where the firm has a “buy” rating. The brokerage believes that Gland Pharma is expected to benefit from the emerging opportunities in the china markets, leveraging the strong muscle of its parent company which has an established presence in China.

“The arrangement with Russia’s RDIF to manufacture 252 mn doses of Sputnik V Vaccine is a crucial point for the company as it has not only provided a new growth avenue but has also taken the company closer to its strategy to enter the lucrative biosimilar space. Structurally being an established player in the injectables, Gland is set to benefit from the rising preference for injectables. At the current market price, the stock is trading at a P/E multiple of 45.2x/29.4 times, its FY22E/FY23E earnings per share, thus pointing towards a further room for expansion. We have also introduced FY24E estimates in this note.

Strong domain expertise and growth prospects, a sturdy earnings track record and strong financials are the key positives for Gland. We retain a Buy recommendation on the stock with a revised target price of Rs 4,100,” the brokerage has said.

The shares of Gland Pharma were last trading at Rs 3,402 on the BSE.

Disclaimer

All of the above 3 stocks are picked from the research report of Sharekhan. Investing in stocks is risky and investors should do their own research. The author, the brokerage firm or Greynium Information Technologies Pvt Ltd is not responsible for any losses incurred due to a decision based on the above article. Investors should hence exercise due caution as markets have run-up significantly.

1. Steel Authority of India:

ICICI Securities has placed a ‘Buy’ call on the scrip of Steel Authority of India at a price of Rs. 130 ( the price at the time of recommendation). The brokerage sees the target for the scrip at Rs. 160 i.e. an upside of over 28% from the last traded price of Rs. 124.8.

“SAIL has adopted a focused approach on improving its volume, improving its operational efficiencies, operating the facilities at optimum levels, deleveraging its balance-sheet, etc.

In line with its focus on reducing the borrowings. SAIL has reduced its net debt by Rs. 16200 crore in FY21. Going forward also, we expect SAIL’s net debt to further reduce by Rs. 6800 crore, over the next couple of years. We model sales volume of 17 MT for FY22E and 19 MT for FY23E. We value the stock at 5.5x FY23E EV/EBITDA and arrive at a target price of Rs. 160 (earlier Rs. 130). We maintain our BUY recommendation on the stock”, said the brokerage firm in its report.

SAIL has been among the top companies which have reduced debt substantially by as much as Rs. 18,551 crore in the FY 2020-21 and this has been aided by increase in steel prices.

The scrip of SAIL last traded at a price of Rs. 126 per share on the NSE.

2. ONGC:

Geojit Paribas has given a 20.88% upside for the stock of ONGC i.e. a key oil drilling and exploration company of India. The target price seen for the scrip is Rs. 145 and at the time of stock recommendation, the stock quoted at a price of Rs. 118.45.

Rationale for the Buy on ONGC as suggested by Geojit Paribas:

With sharp recovery in crude oil prices in FY21, we expect the segment to witness further growth in coming quarters. Upward revision in Gas prices and any improvement in demand scenario should boost the performance further. Therefore, we reiterate our BUY rating on the stock with a revised TP of Rs. 145 based on SOTP valuation, said the brokerage in its report dated June 29, 2021.

“Considering the full recovery in crude volumes and realization, ONGC’s topline performance now largely depends on movement in gas prices and its offtake. Revenue growth from Natural gas and Value-Added products is expected to improve as the impact from partial lockdowns mitigates. Also, possible hike in natural gas prices could drive the performance further”, added the brokerage.

Financials:

The company’s standalone revenue registered a decline of 1.2 percent YoY to Rs. 21,189 crore owing to lower realization as well as weak demand. Nonetheless, EBITDA improved owing to lowering of material costs as well as other expenses. PAT also registered a 144.6% YoY increase.

3. Balaji Amines:

CD Equisearch has given a Buy recommendation for this specialty chemicals company scrip of Balaji Amines At the time of recommendation, the price of the scrip was at Rs. 2670.25, while the suggested upside is Rs. 3613, an upside of over 28%.

The company is a specialist in the manufacturing of Methylamines, Ethylamines, Derivatives of Specialty Chemicals and Pharma Excipients. Also the company is into manufacturing of derivatives that are downstream products for various Pharma /Pesticide industries apart from user specific requirements.

“The stock currently trades at 25.5x FY22e EPS of Rs. FY23e EPS of Rs. 105.4and 22.3 xFy 23e EPS of Rs. 120.44. ROE would improve to 32.7% in FY22 and 28% in FY23. Growth in the coming years would barely stymie not least due o planned debottlenecking of acetonitrile plant, increased capacity utilizations of both DMF and newly unveiled ethylamine plant. The strong demand for EDA shall also have a larger role to play. Better negotiating power and economies of scale arising out of future investments will improvise the company’s cost structure and provide it with necessary economic moat. Free cash flows would rise not unremarkably this fiscal largely due to record profits. we retain our buy rating on the stock with revise target of Rs 3613 (previous target: Rs 1104) based on 30x FY23 earnings”, said the brokerage report.

The scrip of Balaji Amines last quoted at a price of Rs. 2821.15.

4. Vardhman Special Steels

ICICI Securities has set out a target price of Rs. 300 for this medium and small steel entity, i.e. sees a potential upside of over 19 percent.

VSSL is currently in a sweet spot on the back of a) recent price hike received from OEMs, b) receipt of the long-awaited environmental clearance (EC),which has cleared the pathway for expansion plans, c) good demand from the user industry segment. On the back of healthy operating environment,we remain positive on the stock. On the back of recent price hike received by the company from OEMs, we upward revise our estimates both for FY22Eand FY23E. We value the stock at 7.5x FY23E EV/EBITDA and arrive at a target price of Rs. 300 (earlier Rs. 240). We maintaining BUY recommendation on the stock, said the brokerage in its report.

Disclaimer:The stocks listed in the story are taken from different brokerage reports. Investing in stocks is risky and investors should do their own research. The author, the brokerage firm or Greynium Information Technologies Pvt Ltd is not responsible for any losses incurred due to a decision based on the above article.

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Company Profile Of Clean Science and GR Infra:

As per the company’s website, Clean Science is a Maharashtra Pune-based fine chemical manufacturing and exporting company of India. The company develops unique chemical process in-house that are eco-friendly as well as competent on the cost parameter. Furthermore, for some of the specialty chemicals the company is the leading manufacturer globally.’

GR Infraprojects:

The company is a road Engineering, Procurement and Construction (EPC) company and has recently added railway sector to its portfolio. Also, the company is into manufacturing activities wherein it processes bitumen, manufactures thermoplastic road-marking paint, electric poles and road signage and fabricate and galvanize metal crash barriers.

Issue details

Clean Science: The Rs. 1546 crore IPO of Clean Science is purely an OFS by existing shareholders and promoters and the entire proceeds shall be available to the entities’ paring their stake. Further as per the company’s Wholetime Diector the company has enough cash of Rs. 250 crore on its balance sheet.

IPO Price– Rs. 900

Peers for the company- Vinati, Fine Organics, Atul, Camlin, PI Industries

GR Infraprojects:

The IPO of GR Infra shall also be a complete OFS in the price band of Rs. 827-837 per share. The issue size of the offer is Rs. 963 crore. So, by and large the issue is being floated to providea liquidity opportunity to the existing shareholders of the company.

Peers of the company: KNR, PNC, IRB etc.

Valuations:

On the valuation front, GR Infra is said to be attractive commanding a P/E of 8.5 as against the industry average P/E of 16.73.

“In terms of the valuations, on the higher price band, GR Infra demands a P/E multiple of 8.5x based on FY21 post issue fully diluted EPS and EV/EBITDA of 6.5x post issue fully diluted FY21 EBITDA. Almost all listed peers are trading in the range of 11x – 45x and industry average is at 22x. Despite of reporting better return ratios compared to peers, GR Infra is valued at a significant discount to peers, said Ashika Research firm. Thus, issue looks attractive in terms of valuation.

Given the healthy growth prospects and considering the strong emerging opportunity for road infrastructure, strong order book with order book to sales ratio of 2.4x, timely execution of order, expand to new geographies and segments, strong financials and healthy balance sheet augur well for the company’s performance going forward. Hence, it is recommended to “SUBSCRIBE” the issue.

Likewise, IPO Of Clean Science has also been given a ‘Subscribe’ call by Ashika Research on the premise that the company demands a P/E multiple of 48.2x based on FY21 post issue fully diluted EPS. Almost all listed peers are trading in the range of 42x – 77x and industry average is at 60x. Despite of reporting better return ratios compared to peers, CSTL is valued at discount to peers. Thus, issue appears attractive for

investment.

Further the research firm has given the following rationales

Given the healthy growth prospects and China plus one policy, largest manufacturer of certain specialty chemicals, expanding manufacturing facility, expanding R&D infrastructure, strong financials and healthy balance sheet augur well for the company’s performance going forward. Hence, it is recommended to “SUBSCRIBE” the issue.

ICICI Direct has also iterated a ‘Subscribe’ call to the issue of Clean Science and said The company recorded revenue growth of 14% CAGR in FY19-21 supported by higher volume growth across the segments. With changes in the anisole manufacturing technology, it was able to improve gross margins, to a certain extent, and thereby OPM. At | 900, the stock is available at 48.2x FY21. We assign a SUBSCRIBE rating to the issue, added the brokerage report.

Conclusion:

If you are having good cash flow you can consider investment into both of these IPO offers. Nonetheless, if you have two choose between the two, analysts have given a preference to the IPO of Clean Science as the company has been consistent with its financial performance, also GMP for the scrip is between Rs. 400- Rs. 450, suggesting almost 50% listing gains. Nonetheless, long term potential of the scrip is also good with good earnings expectation as the stock can hit a price of Rs. 2000 – Rs. 2500 in a short period.