Month: November 2021

Wedding Loans

This loan is intended to assist couples and families in dealing with the financial stress of planning a wedding. It can be used to cover key wedding expenses such as the venue, guest accommodations, jewellery, food, and decoration. During peak wedding season, interest rates for these loans are usually higher than during the off season. The Personal Loan product will help you finance your dream wedding. It’s intended to be a one-stop shop for all of your financial demands and issues.

Home Renovation

Do you want to rebuild your kitchen, replace your old furniture around the house, or perhaps spruce up your patio?

Renovations to a home can be expensive, especially if the modifications are significant. Not everyone has the cash on hand to complete a renovation when they want to, so a Home Renovation Loan is a simple alternative. You can get a Personal Loan for Home Renovation from HDFC Bank and give your house the makeover it deserves. You will not only improve the aesthetic appeal of your property, but you will also increase the value of your home for future sale.

Vacation loan

You can take out a travel loan to support your holiday plans without jeopardising your savings and investments. This form of personal borrowing is then referred to as a travel loan. You will be required to present travel documentation in order to qualify for this loan. For example, airline tickets, hotel reservations, passport or visa information for international travel, and so on. With the help of a personal loan, you may take your family on a well-deserved vacation without depleting your funds. Your travel expenses are covered by a personal loan, and the funds can be utilised anywhere and at any time.

You can take out a travel loan to support your holiday plans

Consumer durable loan

Consumer durable loans are also available from banks at no cost EMI. Any consumer durable item, such as a phone, refrigerator, furniture, washing machine, microwave, and so on, can be purchased using this form of loan. The product’s cost is divided into EMIs, which can be returned over a set period of time. Some products may require a deposit or a processing fee, while others do not.

Pension loan

Yes, retirees can take out loans worth at least 7 to 10 times their pension to cover any financial emergency. Typically, this loan can only be obtained from the same bank where the pensioner receives his or her pension.

Asset quality outlook improving

According to the brokerage firm, the asset quality outlook for public sector banks is improving gradually after a prolonged corporate NPL cycle – gross non performing asset ratios had reached the peak of 15% in FY18. a) Government initiatives to boost manufacturing; b) rising commodity prices; c) deleveraging by large corporates; and d) balance sheet cleanup, along with the increasing pace of stressed asset resolution, have resulted in GNPA ratios moderating to 9.5% as of FY21.

“Most public sector banks carry healthy PCR in the 63-70% range (barring BoI with 79%). This places them broadly in line with private peers. Thus, we estimate credit costs to moderate, but believe normalization to be an FY23 event,” the brokerage has said.

Strong rebound in earnings

Motilal Oswal in its latest report has also said that these banks are well-placed to deliver a strong rebound in earnings as we estimate FY22E PAT to be 11 times of the sum of FY17-21 PAT, while FY22-24E earnings would grow at a healthy 25% CAGR.

“We estimate RoA/RoE to improve to 0.8%/13.2% for FY24E v/s 0.4%/6.1% for FY21. For the past few years, PSBs have focused on strengthening their balance sheets by improving the coverage ratios, which improved significantly to 68% in FY21 v/s 47% in FY18. During FY15-21, the Top seven public sector banks took a significant stock of provisions towards stressed accounts, with the total provisions coming in at Rs 7.2t. Thus, provisions as a percentage of PPoP stood elevated at 63-144% in FY20,” the brokerage has said.

But the stocks of Bank of Baroda, Union Bank, Canara Bank, SBI and Indian Bank

Motilal Oswal has a buy call on the stocks of public sector banking names like State Bank of India, Union Bank of India, Indian Bank, Canara Bank and Bank of Baroda. The highest stock price gains that are being seen are in the stocks of Union Bank of India, State Bank of India and Bank of Baroda.

As far as we at goodreturns are concerned, while there maybe value in PSB stocks to buy them, the indices have run-up too sharply, thanks to huge inflows into mutual funds. We believe that it makes sense to avoid pumping large sums of money into stocks at the moment. Be a little cautious only because of where the markets are at the moment.

Disclaimer

The stocks have been picked from the brokerage report of Motilal Oswal Financial Services. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

2QFY22 results of Astec Lifesciences Ltd

According to the brokerage “Export volumes grew 8% YoY in 2QFY22, whereas domestic volumes fell 28% YoY, as the company allotted the limited capacity available with it (in the context of the Mahad shutdown) to exports. Exports were also impacted by container shortages and higher freight costs. Almost 33% of 2Q export sales (including CRAMS) were deferred to 3Q: this translates into ~Rs215m of deferred sales that will be recorded in 3QFY22.”

IIFL Securities has also said that “Besides, another ~Rs80m worth of material could not be despatched due to logistical hurdles. Hence, overall, ~Rs300m of revenues has spilled over from 2Q to 3Q. Volume growth was 11% in 1HFY22. Exports accounted for 55% of the company’s revenues for 2QFY22. Capex is seen at ~Rs1.5bn in FY22, although management indicated that CAPEX plans may need to be revised upwards. Projects that have been under implementation include the herbicide unit (now commissioned), the new R&D center (expected to be ready by FY23- end), and the new fungicide plant (details on CAPEX for this unit to be shared by the next investor call).”

Management’s expectation

IIFL Securities in its research report has said that “The company’s management has guided to very aggressive and high growth in the CRAMS business; specifically, management guided for ~50% CAGR in the CRAMS business for the next three years. Management expects to successfully achieve its FY22 profit growth target of 15-20%. Management also expects EBITDA margins to go up to ~24% in the next few years, from 20- 22% at present.” The brokerage has also clarified that “This year, management expects 20-25% growth in enterprise sales, of which 15pps should come from volume growth. Four new CRAMS products are expected to be launched in FY22, plus another one in enterprise sales. Thereafter, two large enterprise products should be commercialised by 4QFY23: these are triazole fungicides.”

Buy Astec Lifesciences Ltd with a target price of Rs. 1572

IIFL Securities claims that “Ramp-up of capacity utilisation at the new herbicide unit, to be followed by commercialisation of two new triazole fungicides by 4QFY23, should drive strong growth. Besides, higher prices of propiconazole should boost margins, and visibility is strong. Hence, we raise FY22ii EPS by 8% to Rs39.3, to reflect a likely jump in earnings in 2H on revenue deferrals, rising prices and strong demand; we tweak up FY23-24ii EPS by 3% each. Our TP, rolled over to Dec-22, rises to Rs1,572. We keep our target 1YF P/E unchanged at 30x, and believe it is justified by promising growth prospects, healthy financial metrics and strong parentage.”

Disclaimer

The stock has been picked from the brokerage report of IIFL Securities Limited. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

Quant Tax Plan

The Quant Tax Plan has been rated No 1 by Crisil and also has a 5-star rating from Value Research. This fund is an Equity Linked Savings Scheme, which means an investment of up to Rs 1.5 lakh qualifies for tax rebate under Sec80c of the Income Tax.

The returns seen above and simply fantastic and naturally they also have largely to do with the way the stock markets have rallied in the last few quarters.

Portfolio and Sip details of Quant Tax Plan

The minimum investment required to start a Sip in the Quant Tax Plan is Rs 500, with an initial sum of Rs 500. It is important to note that being a tax plan there is a lock-in period of 3-years. The assets under management is not very large at Rs 487 crores.

Almost 98.85% of the funds are invested in equities with a low or negligible holdings in cash. The company has a significant holdings in the likes of L&T, State Bank of India and Reliance Industries. This fund is good for those looking to save taxes as well as invest for returns. However, we suggest limiting your exposure given the way equities have rallied in the last few quarters.

Canara Robeco Bluechip Equity Fund

This fund has been rated No 1 by Crisil and has a 5-star from Value Research and Groww as well. In fact, it is a very popular mutual fund scheme for SIPs as well. The fund has assets under management of Rs 5030 crores and has done well over the last few years.

The returns are not high as Quant Tax Plan, but, they compare much better than some peers.

SIP and other details of Canara Robeco Bluechip Equity Fund

Investors planning to put money through Systematic Investment Plans (SIPs) can do so with a minimum sum of Rs 1,000 every month. The fund has generated a very good returns in the past, but, that does not guarantee solid returns in the future.

We believe returns are unlikely to be extraordinary as in the past. Therefore, investors from here on, have to hope for some moderation in returns. In fact, we suggest that investors should only consider SIP investment and avoid large scale lump sum investments, especially in pure equity oriented mutual funds.

Disclaimer

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 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

Attractive dividend yield of 8%

For the FY 2020-21, Coal India declared a dividend of Rs 12.5 per share in total. The first ex dividend date was on 19th November and the second was on March 15, 2021. The first dividend was Rs 7.5 and the second was Rs 5. Now, if you take the current market price of Rs 153, the dividend yield works to 8.16%.

Now given that banks, at least the large private sector banks and government owned banks offer an interest rate of a maximum of 5.5 on deposits, this dividend yield in excess of 8% is now bad at all.

Dividend yields could go even higher

So far for FY 2021-22, the company has not declared a dividend so far. This means that those who buy the shares could receive dividends in the future. Another thing to note as there is a possibility that the government declares an even higher dividend this year. The government is running a huge fiscal deficit and there is a possibility that PSUs could declare higher dividends. If that were to happen the yields could spike even further.

Recently, the company declared its quarterly numbers, which were not very good. For the quarter ending June 30, 2021, the company reported a Consolidated Total Income of Rs 25963.12 Crore, down -7.19 % from last quarter. Realizations and the net profits of the company were also not too great. Brokerages remain optimistic on the stock of Coal India.

What brokerages are saying?

ICICI Securities has set a price target of Rs 253 on the stock. .According to the brokerage recent events leading to a shortfall in supplies has highlighted coal’s importance and necessity until large-scale storage solutions become viable. “Elevated global coal prices and supply chain bottlenecks would likely make Coal India a preferred coal supplier for the domestic consumers in the medium term,” the brokerage has said. CLSA also put a buy call on the stock of Coal India with a price target of Rs 210. This is significantly lower than the price set by ICICI Securities.

“The Q2 EBITDA was below estimates on higher costs and lower realisations, however, EBITDA ex-OBR (0ver burden removal) fell 5 percent Quarter on Quarter to Rs 272 per tonnes. Receivables fell to Rs 14,900 crores,” the brokerage said in a report.

We believe that the sharp fall in the stock post quarterly numbers, offers good opportunity for dividends.

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies and the author are not liable for any losses caused as a result of decisions based on the article. Caution is advised as stock markets have more than doubled from Covid-induced lows.