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Tata Motors

The firm is bullish on the stock of Tata Motors and sees good traction going ahead. It has suggested to buy the stock of Tata motors for long term. Motilal Securities recommends BUY at Rs.317 with target price of Rs.400.

The stock gained 17.08 percent over three years, compared to 45.46 percent for the Nifty 100. This year, the stock has fared well, with a total return of 67.27 percent to date.

According to it, JLR’s retails grew 68% YoY to ~124.5k in 1QFY22, with LR/Jaguar growing 72.5%/55%.

‘Wholesales stood at 84,442 units (excluding China JV), up 72.6% YoY. However, this was ~30,000 units lower (~27%) than what otherwise would have been planned as a result of semiconductor supply constraints and the impact of COVID-19, although this reduction had been broadly anticipated. It expects the situation to start to improve in 2HFY22. Hence, it expects a negative FCF of ~GBP1b, with a negative EBIT margin in 2QFY22,”the brokerage firm has said.

TTMT’s three businesses are all recovering. While the India CV business is recovering cyclically, the India PV business is recovering structurally. JLR is experiencing a cyclical comeback as well, thanks to a good product mix.

Godrej Agrovet

The firm examined current patterns in palm oil prices, the factors that drive these prices, and the resulting impact on GOAGRO’s Palm Oil division, which contributed 12 percent of revenue and 17 percent of EBITDA in FY21. The stock has performed with a total return of 23.10 percent to date.

Its stock is currently trading at Rs 663.55. It currently has a market capitalization of Rs 12808.94 crore. The company reported gross sales of Rs. 52501.3 crores and total income of Rs. 51596.9 crores in the most recent quarter.

“Global palm oil prices have seen a sharp rally, primarily due to higher demand from the Bio-Diesel segment (primarily the US market) and increased demand from China. However, with expansion in plantations, coupled with the easing of logistic issues, the outlook for palm oil production remains strong. As a result, Jun’21 palm oil prices fell 12% MoM. Palm oil prices were flat on a YTD basis and up 55% YoY to USD1,017/mt,” firm said it its report.

China is buying huge quantities of palm oil, pumping up prices of the hard oil that India imports from Indonesia and Malaysia, to meet its domestic demand. In CY21, China’s palm oil imports increased 6% YoY to 7.2mmt (v/s 6.8mmt in FY20), it added.

Laurus Labs

The Annual Report Analysis of Laurus Labs (LAURUS) shows a significant increase in ROE, owing to a solid head start in finished dosage forms (FDF), improved operational profit, and a lower borrowing rate, the broking firm said.

Its share price today is 682.15. It currently has a market capitalization of Rs 36574.82 crore. The company reported gross sales of Rs. 47687.2 crore and total income of Rs. 47960.4 crore in the most recent quarter. This year, the stock has fared well, with a total return of 92.69 percent to date.

“LAURUS is investing INR15-17b in building R&D centers and greenfield/brownfield expansions for a meaningful commercial benefit from FY23. We raise our EPS by 3%/6% for FY22/FY23, factoring in improved business scope in the ARV – Synthesis segment. We raise the PE multiple to 24x (from 18x earlier) as LAURUS fortifies its skillsets across the clinical phase towards (a) commercial manufacturing in the CDMO segment (Synthesis), (b) gaining traction in the Biotech space, and (c) total integration as well as pipeline buildup in the ARV/Non-ARV space.” the firm said.

Accordingly, we arrive at TP of INR800 on a 12M forward earnings basis and reiterate BUY on the stock, it added.

Indian Hotels

IH had an investor meeting at which it outlined its strategy to capitalise on business recovery, focus on new brands and companies, seek asset-light expansion, maintain expenditure optimization, strengthen the Balance Sheet, and focus on RoCE. At Rs.152, Motilal Securities recommends BUY with a target price of Rs.180.

The current share price is 151.8. It currently has a market capitalization of Rs 18070.78 crore. The company reported gross sales of Rs. 11331.5 crores and total income of Rs. 12436.7 crores in the most recent quarter.

“As per ‘Aspiration CY22′ announced in CY18, it looked to sign 15 Hotels under management contract annually. However, it added 22/29/17 Hotels in FY19/FY20/FY21,” the firm said in the report.

Total operating cost fell 45% to INR19.2b and fixed cost per month declined by 28% to INR1.2b in FY21 on the back of manpower optimization and reduction in corporate overheads. Staff/room ratio has reduced substantially for IH across brands, it added.

4 Stock Recommendations From Motilal Oswal For Solid Returns

Disclaimer

The above mentioned stocks have been picked from brokerage reports. The author, the brokerage or Greynium Information Technologies do not take any responsibility for losses that maybe incurred. The above article is for informational purposes only.

Launch of NACH mandate for NPS subscribers

Regarding the launch of NACH mandate for the benefit of Nodal Officers/PoP/Corporate, PFRDA on its recent circular dated June 04, 2021, has stated that “At present, the nodal offices of Government Sector deposit NPS contributions of associated Subscribers by preparing Subscriber Contribution File (SCF) and uploading the same in “NPSCAN system” after validating it. Thereafter, the Nodal Office visits its Bank (accredited bank) in order to transfer the funds (equivalent to the amount uploaded in the SCF) to the Trustee Bank (TB) appointed by PFRDA.” PFRDA has observed instances where in the transferred contributions are returned due to certain errors as mentioned below:

• Non-mentioning of Transaction id in the inward message while transferring the funds
• which is a mandatory field.
• Invalid 7-digit A/c no.
• Remittance made by Offices for expired Tran id.
• Amount mismatch between the file and actual amount remitted.
• FRC completed previously.
• Non-existence of Tran id provided in CRA system.
• Duplicate fund received on same day.
• Different PAO id in beneficiary a/c.

To counter the above-said errors, PFRDA has clarified in its circular that “In order to overcome the above challenges and to ease the process of contribution upload by Nodal officers, PFRDA is pleased to introduce a NACH mandate jointly hosted by Trustee Bank (TB) and Central Record Keeping (CRA) through National Automated Clearing House (NACH) operated by National Payments Corporation of India (NPCI).” The circular further added that “The NACH mandate is technology enabled which offers end to end solution and is a secured mode of contribution fund transfer. Under NACH Mandate, all the nodal offices have to provide the ‘one-time mandate registration’ for auto debiting their bank accounts with the amount based on the SCF uploaded in NPSCAN. The facility can also be availed by POPs/Corporate which prepares SCF and transfer contributions on a regular basis. There is no additional cost to avail the facility from CRA and TB.”

Withdrawal of pension corpus of Rs 5 lakh without purchasing annuity

Recently PFRDA has also enabled subscribers to withdraw the whole accumulated pension amount without acquiring an annuity if the pension corpus is less than Rs 5 lakhs. The Pension Regulator has said in a gazette notification that “where the accumulated pension wealth in the Permanent Retirement Account of the subscriber is equal to or less than a sum of Rs 5 lakh, or a limit as specified by the Authority, the subscriber shall have the option to withdraw the entire accumulated pension wealth without purchasing an annuity and upon such exercise of this option, the right of such subscriber to receive any pension or other amount under the National Pension System or from the government or employer, shall extinguish.”

Extension of timelines for activities under National Pension System (NPS) and NPS Lite- Swavalamban scheme

PFRDA has also recently modified certain timeframes for activities in the context of the second wave of the pandemic under the National Pension System (NPS) and NPS Lite- Swavalamban. “Point of Presence (POPs) are advised to undertake NPS related activities within prescribed Turn Around Time (TAT) under the Pension Fund Regulatory and Development Authority (Point of Presence) Regulations, 2018, and guidelines issued there-under, in order to ensure timely and efficient service to subscribers, PFRDA said in a circular.

Partial withdrawal of NPS subscribers through self-declaration

Recently, PFRDA has allowed NPSsubscribers to partially withdraw the amount by self-declaration. In its recent circular dated January 14, 2021, PFRDA has stated that “on Ease of Partial withdrawal of NPS Subscribers through self – declaration, the Partial Withdrawal Requests will be processed on the basis of Self-declaration provided by Subscriber for reason of partial withdrawal.” The circular has also clarified that “No supporting documents (w.r.t. stated withdrawal reason) are required to be submitted by the Subscriber for availing Partial Withdrawal. The Subscriber is required to accept the ”Self-declaration” for Partial Withdrawal which is provided in Withdrawal Form as part of – Declaration by the Subscriber. In addition, the Subscriber is required to provide Bank Proof of the details of Bank Account registered in CRA system. If the Bank Account details given in the application are different from the Bank Account details registered in CRA system, then partial withdrawal request shall be rejected by POP. ” According to PFRDA, after three years of continuous subscription, NPS subscribers would be allowed to make up to 25% partial withdrawal of their own contribution.

Contributions under D-Remit via IMPS

NPS users are now allowed to deposit their contributions using a Direct Remittance System (D Remit) through IMPS (Immediate Payment System). The circular published on 10 March by the Pension Fund Regulatory and Development Authority (PFRDA) has clarified that “The functionality of accepting IMPS has been released from 1 March 2021. However, unlike the contributions received through NEFT/RTGS which are returned on the same day in case of a return, the IMPS contributions in case of a return shall be effected on T + 1 through the ‘credit adjustment process’ as per the guidelines of NPCI and based on D Remit process guidelines issued by the PFRDA.” Existing NPS subscribers under the government, non-government, or all citizens model can make their voluntary contributions through Direct Remittance using their savings bank account by generating a virtual ID linked to their Permanent Retirement Account Number (PRAN). In both tier I and tier II accounts, the minimum D-Remit transaction amount is limited to Rs 500. By generating a Virtual ID, one can use the D- Remit facility without any additional charges.

Premature exit rules for NPS Lite Swavalamban Subscribers

PFRDA has stated in Circular No. PFRDA/2021/21/SUP-NPST/1, published on July 2, 2021, that “as per the 6th Amendment of Exit Regulations, the Swavalamban Subscribers whose accumulated pension wealth do not exceed one lakh rupees and if they are not eligible to migrate to Atal Pension Yojana (APY), can opt to prematurely exit with lump sum payment.” The circular further added that “those eligible Subscribers as mentioned above are not required to continue in the Swavalamban scheme for minimum period of twenty-five years irrespective of the receipt of Govt of India (GoI) co-contribution under Swavalamban by them. However, if GoI’s co-contribution was availed by those eligible Subscribers and the same shall be deducted along with the returns generated from the corpus at the time of their exit.”

1. Issue details:

Issue offer date: The issue of IIFL 10% NCD opened on July 6 and will be available until July 28 for subscription

Issue price/face value- Rs. 1000 per NCD

Issue Closes on 28th July, 2021

Registrar Link Intime India Pvt Limited

Allotment First Come First Serve Basis ***

Listing On BSE Ltd and NSE Ltd

Issue Price Rs. 1,000 per NCD

Face Value Rs. 1,000 per NCD

Minimum Application Rs. 10,000 (10 NCDs) & in multiples of ₹ 1,000 (1 NCD)

Issue Size Rs. 10,000 million (₹ 1,000 cr)

Nature Unsecured Subordinate Redeemable NCD

Credit Ratings CRISIL AA/ Outlook STABLE and Brickwork AA+/ Outlook Negative

2. Company profile:

IIFL Home Finance is the fully owned subsidiary of IIFL Finance and is the housing finance company. The company is into offering home loan, secured loan as well as affordable housing project finance loans.

3. Rating:

The NCD issued has been rated by CRISIL as AA/ Outlook STABLE and Brickwork AA+/ Outlook Negative. The rating suggest high degree of safety with respect to timely servicing the financial obligations and carry low credit risk.

4. NCD objectives:

The proceeds mopped up from the offering shall be put to onward lending, financing, repayment or pre-payment of principal as well as interest in respect of existent borrowing as well as general corporate purposes. The company’s prospectus available for the purpose said it intends to “utilise the funds which are being raised through this Tranche I Issue, after deducting the Issue related expenses to the extent payable by our Company (“Net Proceeds”), towards funding the following objects i.e. onward lending, financing, repayment/prepayment of interest and principal of existing borrowings (collectively, referred to herein as the “Objects”) and other corporate purposes.

5. Returns:

6. Taxation:

Interest earned on these NCDs are fully taxable as per the investor’s slab rate in the year of the receipt of the interest income.

7. Conclusion:

These NCDs need to be invested into by investors who have a good enough risk-appetite as IIFL Home Loan NCD offering is not backed by the company’s financial assets and if the company’s financials weaken at any point during the NCD tenure, the company may default. This is even as the credit rating for the NCD is pretty Ok with a ‘Stable’ outlook but notably can change over time. Furthermore, the instrument is a bet for a longer tenure so not suitable for all and those investors who do not understand credit risk should give this offer a complete miss despite the high interest rate.

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