Author: root

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.