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Buy BPCL for 33% Gains

Motilal Oswal Institutional equities sees gains of up to 33% on the stock of BPCL from the current market price of Rs 464, and believes the stock can rally up to a target price of Rs 615 from current levels.

BPCL reported a beat on our estimates, driven by a better-than-expected performance in the Marketing segment (volumes were down 14% QoQ). Refining throughput in 1QFY22 was aligned with demand moderation due to the second COVID wave (throughput was down 18% QoQ).

“With the total phasing out of the COVID lockdowns and closure of refinery complexes (est 3 million barrels of oil per day oveer the next 2-3 years), the refining margin would return to its long-term average (of $5 to $6 per barrel),” the brokerage has said.

According to Motilal Oswal, the management stated that an increase in personal mobility due to COVID continues to drive higher demand for MS (thus aiding cracks). Demand for HSD is also seeing strong recovery in the US, coupled with the re-opening of the Chinese and Indian economies.

“A virtual data room has been opened up since Apr’21, and the next two steps consist of a discussion with the senior management and visiting physical assets. We value BPCL at 2.3 times Sep’23E price to book value. We reiterate Buy on the stock of BPCL, with target price of Rs 615,” Motilal Oswal has said in its report.

Buy ONGC for 29% gains

The brokerage is also bullish on the stock of ONGC and sees gains of 29%. ONGC reported in-line numbers and crude oil sales; lower gas sales were offset by higher-than-estimated VAP sales. Gas offtake was lower due to lower offtake from GAIL, led by shutdowns at the customer end.

“Brent prices have started cooling off from the peak of USD75/bbl in Jul’21 to $70 per bbl. We expect prices to return to normal levels of USD60-65/bbl as OPEC+ gradually increases its oil production (by 0.4mnbopd per month from Aug’21). We forecast Brent price of $63/$60 per bbl for FY22E/FY23E, considering the easing of the current 5.8mnbopd production cuts,” the brokerage has said.

We value the company at 10 times Sep’23E adjusted EPS of Rs 11.6 and add the value of investments to arrive at a target price of Rs 150. Reiterate Buy on the stock,” the brokerage has said.

Disclaimer

The article is informational in nature, which is taken from the brokerage report of Motilal Oswal institutional Equities. 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 the article.

1. Nippon India ETF NV 20:

This is an Open Ended Index Exchange Traded Scheme in existence since 2015 from the house of Nippon India Mutual fund. The equity large cap fund aims to offer return corresponding to the overall returns of the securities as represented by the Nifty 50 Value 20 Index. Latest NAV of the scheme as on August 13, 2021 is 93.31. You can initiate an investment into the fund by deploying a minimum of Rs. 5000.

Risk-o-meter has placed the fund under the very high risk category. The ETF commands an asset size of Rs. 37 crore as on July 31, 2021, while the expense ratio is 0.36%.

The fund’s portfolio comprises stocks including L&T, Infosys, TCS, HUL, ITC, Wipro, HCL and Sun Pharma among others. Mr. Mehul Dama has been managing the fund since November 2018.

2. Kotak NV 20 ETF:

This is an open-ended large cap equity scheme from the stable of Kotak Mahindra Mutual fund house. Again launched in the year 2015, the scheme since inception has offered 18.79% return. The scheme is benchmarked against Nifty 50 Value 20 TRI. It is again a very high risk plan. NAV of the fund as on August 13 was 92.225.

The ETF commands a very low fund size of Rs, 25.39 crore, while it attracts an expense ratio of 0.14%.

Minimum investment in the scheme can be made for Rs. 5000, with minimum additional investment amount of Rs. 1000. Ideal investment in the fund should be for 5 years and more.

The scheme’s funds are majorly invested into technology and financial scrips, followed by FMCG, construction and energy verticals among others. Top holdings of the fund include TCS, Infosys, HUL, L&T, ITC, HCL, Wipro, Sun Pharma etc.

3. ICICI Prudential NV20 ETF:

Launched in 2016, this is an open ended ETF which tracks Nifty 50 Value 20 Index. Last NAV of the fund is 90.53. The mutual fund risk-o-meter classifies the fund to be moderately high on risk. The large cap oriented fund since inception has yielded return to the tune of 19.17%.

The scheme is primarily suitable for investors looking at long term wealth creation solution. The scheme has delivered the best yearly performance between March 2020 and March 2021 with return of over 92%.

It is again a scheme with major allocation in technology, financials and FMCG sectors among others. Mr. Kayzad Eghlim has been managing the scheme since inception.

4. Axis Bluechip Fund:

It is a CRISIL 4-Star and Value Research 5-Star rated large cap fund. An 11 year old fund since inception has offered return of over 13.5% and tracks Nifty 50 TRI. The assets under the scheme as on July 31, 2021 are Rs. 29,161 crore, while the fund carries an expense of 1.76%.

Prime exposure of the fund is in equity and equity related securities of large cap companies including derivatives. The fund has a minimal exposure in even midcap stocks.

The benefit of investing in these bluechip funds is their exposure to large cap stocks which offers both high liquidity and at the same time is less volatile. The scheme aims to outperform the benchmark with risk lower than the benchmark. By deploying your funds into this scheme you can plan long term financial goals such as retirement, saving for children’s education, future etc.

You can invest in the scheme with a minimum sum of Rs. 500 as a SIP plan. Top stock holdings of the fund include Infosys, Bajaj Finance, HDFC Bank, ICICI Bank, TCS, Avenue Supermarts etc.

5. Canara Robeco Bluechip Equity:

Accorded the highest 5-Star rating by both Value Research and CRISIL, Canara Robeco Bluechip Equity is a large cap fund-equity scheme. NAV of the fund as on August 13 is 39.9. The scheme aims to offer capital growth by primarily investing in companies with a large market capitalization. Since launch in the year 2010, the fund has offered return of 13.42%.

The scheme’s performance is benchmarked against S&P BSE 100 TRI. The bluechip equity fund is a high risk plan with exposure to large cap and apart from that it has some minor allocation in mid-cap stocks and debt.

SIP investment in the scheme can be started with Rs. 1000, while for lump sum investment you need to put Rs. 5000.

Top holdings of the fund are in stocks including Infosys, HDFC Bank, ICICI Bank, RIL, TCS, L&T and HDFC among others.

Top 5 Large Cap Equity Mutual Funds To Invest In Based On 5-Yr Returns

Disclaimer:

Mutual fund investments are subject to market risk. Markets are at record high, so investors need to be even more careful with their investments. Further, mutual funds listed out here should not be construed as investment advice and is for informational purpose only.

GoodReturns.in

Devyani International IPO Listing

Devyani International, the parent company of KFC, Pizza Hut, and Costa Coffee, had a strong launch on August 16, with the stock trading at a 56 percent premium on the bourses.

It started trading at Rs 141 on the BSE and Rs 140.90 on the NSE, against an issue price of Rs 90 per share.

On August 4, the company opened its Rs 1,838-crore initial public offering for subscription, which concluded on August 6 with a phenomenal 116.71 times subscription, generating bids for 1,313.79 crore equity shares against an offer size of 11.25 crore equity shares.

The offer included a Rs 440 crore new issue and a Rs 1,398 crore offer for sale by investor Dunearn Investments and promoter RJ Corp. The proceeds from the new issue will be used to repay the company’s debts as well as for general business objectives.

Krsnaa Diagnostics IPO Listing

Following modest market movement, Krsnaa Diagnostics shares made a lukewarm debut on the public exchanges today. Krsnaa Diagnostics shares opened at Rs 1025 per share, up 7.33 percent from the initial public offering price of Rs 954 per share. Krsnaa Diagnostics’ initial public offering (IPO) received a great reaction from investors, with 64.38 times subscription. The company had a market valuation of Rs 3,218.26 crore when it went public.

Krsnaa Diagnostics has joined industry peers Metropolis Healthcare and Dr. Lal Pathlabs Ltd in being listed. Qualified Institutional Buyers (QIBs) subscribed 49.83 times their reserved amount at the IPO, 116.30 times for non-institutional investors, and 42.04 times for retail investors. There was a fresh issue of up to Rs 400 crore and an offer for sale of up to 85,25,520 equity shares in the first public offering (IPO).

Windlas Biotech IPO Listing

Windlas Biotech’s stock had a lukewarm market debut on Monday, with the stock trading at Rs 437 on the NSE, a 5% reduction to its issue price of Rs 460.

The stock opened at Rs 439 on the BSE, down 4.56 percent.

The Dehradun-based pharma formulations company’s initial public offering (IPO) was held from August 4 to August 6 and sold in the Rs 448-460 range.

It was 22.46 times subscribed, with quotas earmarked for qualified institutional buyers (QIB) receiving 24.40 times subscription, non-institutional investors 15.73 times subscription, and retail individual investors (RIIs) 24.27 times subscription.

Exxaro Tiles IPO Listing

Exxaro Tiles’ shares made its stock market debut on Monday, trading at a premium of 5% over its issue price of Rs 120.

On both the BSE and the NSE, the stock began trading at Rs 126, a 5% gain above the issue price.

On both markets, it rose 10.25 percent to Rs 132.30 as the trade advanced. The ceramic industry’s first initial public offering in more than a decade drew a strong reaction from investors, with the issue being subscribed 10.6 times. From August 4 to 6, the issue was available for public subscription.

Exxaro Tiles specialises in the production and distribution of vitrified tiles, which are mostly used for flooring. The company operates two manufacturing facilities, one in Vadodara and the other in Talod, with a total area of 1.5 lakh square metres.

Gold has been identified as a safe haven over the years against inflation and economic crisis. But why do the investors think so? Because as the economic activities start to roll down, there are fewer investment opportunities that are better than gold. GDPs start to fall in every country and wages of citizens sink suddenly and large scale unemployment is not a surprise.

Against a falling currency and falling equity, investors keep their eyes on gold. Here are 2 examples of when gold rates went to historical heights due to economic slowdown and economic crisis. Falling currency helped the gold market.

Economic slowdown forced higher prices in 2008

As the currency market did not favour some of the investors when the crisis was going on, they tilted towards the yellow metal. Even during last year, when the economic slowdown was rampant, gold stood up as a hedge. The economic crisis is always remembered as a lucrative instrument for the gold market. After 2008, as the globe encountered an economic slowdown, gold rose considerably. In 2008, in terms of US dollar gold prices increased 5.6%. but in 2009 gold prices increased 23.4% and in 2010 the metal rose 29.5% (source: goldprice.org). The same trend is reflected in India.

Anuj Gupta, Vice President – Commodity & Currency Trade at IIFL Securities told a leading English daily, “People around the world come to know that gold is an investor’s haven when other investments like equity, bond, etc. start nosediving. Till 2008, the gold price was at around Rs. 12,500 per 10 gm but after that, there was a steep rise in gold investment globally. So, the gold price has jumped from Rs. 12,500 per 10 gm in 2008 to Rs. 48,000 per 10 gm in today’s retail bullion market – logging around 284% in the last 13 years.”

During the US economic crisis, investors realised again that their equity and currency can fall suddenly, overnight and could leave them even bankrupt. But investing in gold portfolios like gold ETF, gold bonds will always save them from these kinds of crises.

Economic crisis due to pandemic helped in 2020

A similar trend has been followed in the last year, in 2020 when gold prices jumped at a historical level at 24.6% than its earlier year. Compromised economic activities and an unfavourable labour market due to the pandemic pushed investors into gold. As the Indian government kept bond yield low because of the pandemic, gold was a lucrative investment in India. Up-scaling gold rates in the international market did not stop Indians from buying gold, rather they invested more expecting the prices to rise more in future. Investment in gold should always be considered in terms of long term gains.

However, before 2020, the gold prices were seeing moderate growth like 18.9% in 2021. The prices also saw a yearly downfall of prices during 2013-2015 when no major economic threat was arriving. The prices fell 28.3% and 10.4% consecutively in 2013 and 2015 in terms of the US dollar – according to data released by goldprice.org.

As the gold rates started to fall in the international market again due to up-scaling economic activities, it is a good time for investing in gold. Today on 16th August the international gold prices on MCX (FUTCOM, 5th October – expiry date) is standing at Rs. 46848 till 12.15 pm (IST) with a 0.21% downfall and Rs. 100 sink since earlier trading day. Investors should think about this precious metal now for long term gains.