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Why SBI Equity Mutual Funds?

The long-term goal of SBI Equity Mutual Funds is to maximize capital appreciation. They primarily invest in equities and equity-related securities that have the potential to generate high returns. Due to the inherent volatility of equities investing, the risk quotient of these SBI Mutual Funds ranges from moderate to high. In general, investing in equity funds is preferable if you have a long-term aim (say, five years or more). It will also provide much-needed time for the fund to deal with market swings. These funds can be used as retirement funds, child education, capital appreciation, etc,.

The main concern of investors who are hesitant to acquire stock funds at market highs is that prices will likely decline once the markets have peaked. The Nifty is at all-time highs, and investing in an equities mutual fund is a risky proposition.

SBI Technology Opportunities Fund

SBI Technology Opportunities Fund invests in a diverse portfolio of equity and equity-related instruments in technology and technology-related companies with the goal of providing long-term financial appreciation to investors. The 1-year returns on SBI Technology Opportunities Fund Direct-Growth are 82.96 percent. It has returned an average of 22.78 percent per year since its inception. The top 5 holdings in the fund are in Infosys Ltd., HCL Technologies Ltd., Tata Consultancy Services Ltd., Alphabet Inc Class A, Bharti Airtel Ltd.

SBI Technology Opportunities Fund’s NAV as of June 8, 2021, is 129.5.

SBI Technology Opportunities Fund has a total AUM of 665 crores. The direct plan of SBI Technology Opportunities Fund has an expense ratio of 1.37 percent.

SBI Healthcare Opportunities Fund

SBI Healthcare Opportunities Fund Direct Plan has a 1-year growth rate of 56.69 percent. It has generated an average yearly return of 18.24% since its inception. The top 5 holdings are in Sun Pharmaceutical Inds. Ltd., Dr. Reddy’s Laboratories Ltd., Aurobindo Pharma Ltd., Cipla Ltd., Lupin Ltd. SBI Healthcare Opportunities Fund’s NAV as of June 9, 2021, is 247.51. The direct plan of SBI Healthcare Opportunities Fund has an expense ratio of 1.09 percent. SBI Healthcare Opportunities Fund has an AUM of 1,748 crores. The scheme aims to deliver long-term financial appreciation to investors by investing in a diverse portfolio of equities and equity-related instruments in the healthcare sector.

SBI Banking & Financial Services Fund Direct

This fund has been around for 6 years and 3 months, having been established on February 11, 2015. SBI Banking & Financial Services Fund Direct-Growth has assets under management (AUM) of 2,401 Crores, making it a medium-sized fund in its category. The expense ratio is 0.91 percent, which is lower than most other Sectoral-Banking funds. The fund has the majority of its money invested in Financial sectors.

The 1-year returns on SBI Banking & Financial Services Fund Direct-Growth are 68.38 percent.

SBI Small Cap Fund

The 1-year returns for the SBI Small Cap Fund Direct-Growth are 93.47 percent. It has returned an average of 27.35 percent per year since its inception.

The ability of the SBI Small Cap Fund Direct-Growth scheme to provide consistent returns is comparable to that of most funds in its category. The fund has the maximum invested in Engineering, Chemicals, Cons Durable, Construction, Services sectors. The top 5 holdings are in Elgi Equipments Ltd., JK Cement Ltd, Carborundum Universal Ltd., Navin Fluorine International Ltd., Sheela Foam Ltd.

SBI Focused Equity Fund

The fund’s expense ratio is 0.76 percent, which is lower than the expense ratios charged by most other Focused funds.

SBI Focused Equity Fund Direct Plan has a 1-year growth rate of 55.90 percent. It has had an average yearly return of 16.41% since its inception. The top 5 holdings are in HDFC Bank Ltd., Alphabet Inc Class A, Divi’s Laboratories Ltd., Procter & Gamble Hygiene & Health Care Ltd., Bharti Airtel Ltd. The majority of the money in the fund is invested in the financial, healthcare, fast-moving consumer goods, energy, and technology sectors. SBI Focused Equity Fund has an AUM of 14,767 crores.

SBI Equity Hybrid Fund

SBI Equity Hybrid Fund Direct Plan-Growth has 38,141 Crores AUM, making it a medium-sized fund in its category. The fund’s expense ratio is 0.96 percent, which is comparable to the cost ratios charged by most other Aggressive Hybrid funds. The fund now has a 68.98 percent stock allocation and a 16.60 percent debt exposure.

SBI Equity Hybrid Fund Direct Plan has a 1-year growth rate of 41.41 percent. It has had an average yearly return of 15.82 percent since its inception. The top 5 holdings are in HDFC Bank Ltd., Divi’s Laboratories Ltd., Infosys Ltd., GOI, Bharti Airtel Ltd.

What is an Expense Ratio in Mutual Fund?

The cost ratio is the percentage of your investment that you pay a fund to manage your money each year. Because the expenditure ratio is charged on a monthly basis, a high expense ratio over time could cut into your returns significantly due to compounding. Mutual Funds are allowed to charge certain operating expenses for managing a mutual fund scheme as a percentage of the fund’s daily net assets under the SEBI (Mutual Funds) Regulations, 1996. These expenses include sales & marketing, administrative expenses, transaction costs, investment management fees, registrar fees, custodian fees, and audit fees. The ‘Total Expense Ratio’ (TER) refers to all of these expenditures associated with administering and operating a mutual fund scheme. Every investor should be aware of, monitor, assess, and consider expense ratios when making mutual fund investing decisions. It isn’t the only or even the most significant factor to consider when choosing a fund, but it should be taken into account.

6 Best SBI Equity Mutual Fund SIPs To Invest In 2021 For Capital Appreciation

6 Best SBI Equity Mutual Fund SIPs To Invest In 2021 For Capital Appreciation

Engineers India

Engineers India is another stock that brokerage firm Motilal Oswal has recommended. The company reported its quarterly numbers only recently.

According to the brokerage order inflows stood at Rs 7 billion (v/s Rs 1.5b YoY). Order book stood Rs 80 billion, down 16% YoY (order book/revenue: 2.6 times). Revenue at the company for the quarter ending March 31, 2021 stood at Rs 11.2 billion, up 31% YoY and 31% above our estimate, with

the entire beat led by the Turnkey segment.

According to the Motilal Oswal report the dividend yield on the stock itself can work to near 7% in FY 2022. A good midcap stock to hold in the portfolio for long term investors. The stock is also available at a p/e of 11 times one year forward earnings.

Motherson Sumi

Motherson Sumi Systems is one of the largest manufacturers of wiring harnesses for commercial vehicles. The company/group is one of the biggest rearview mirrors for passenger cars in the world. The company has a massive global presence and is the supplier to some of the top auto companies in the world.

Emkay Global has set a price target of Rs 325 on the stock as against the current market price of Rs 252,making it one of the better midcap stocks to buy.

The broking firm has factored robust revenue/EBITDA CAGRs of 14%/33% over FY21-24E, driven by expectations of a cyclical upturn in underlying Auto segments in domestic/ global markets and healthy order-book in SMR PBV.

“In addition, we expect return on equity to expand notably from 10% in FY21 to 29% in FY24E. The proposed restructuring exercise aligns interests of all stakeholders and creates a platform for future growth through both inorganic and organic routes. Reduced stake of Sumitomo Wiring Systems in MSS will allow to pursue acquisition opportunities more aggressively.

Retain Buy with target of Rs 325 (Rs 240 earlier) based on 24 times FY23 Estimated Earnings per Share (20 times earlier). We increase valuation multiple on improving growth prospects and revised P/E multiple is in-line with historical averages. Key downside risks are demand contraction in target markets, weak performance of larger clients, and adverse currency rates, among others,” the brokerage has said.

Shares of Motherson Sumi were trading at Rs 252 on the NSE.

Quess Corp

Quess Corp is a staffing and managed outsourcing services company that caters to the needs across processes such as sales & marketing, customer care, after sales service, back office operations, manufacturing operations, facilities and security management, Human Resources, IT & mobility services, etc.

Broking firm, Motilal Oswal has set a price target of Rs 820 on the stock. The broking firm sees many positives on the stock, including the announcement of a new dividend policy – payout of 33% of FCF over three years, especially as this indicates the management is comfortable with the cash generation ability.

“This further strengthens the view on the digestive strategy by Quess (rather than acquisitive) and indicates increased focus on cash flow. The company has also guided for minimum 70% OCF/EBITDA for FY22, along with reiterating its aim to deliver 20% ROE in FY23. Over the medium term, we expect QUESS to be a big beneficiary of the recent labor law reforms. Our target price of Rs 820 per share implies a multiple of 18x FY23 estimated, earnings per share. Reiterate Buy,” the broking firm has said.

Shares of Quess Corp were last trading at Rs 764 on the NSE, which from the target price makes a good midcap top be a part of the portfolio.

Alkem Labs

Alkem Laboratories is a top player in the pharma business with 21 manufacturing facilities at multiple locations in India and the United States of America. According to broking firm Motilal Oswal, ALKEM is well-placed to benefit from a medium term recovery in the Domestic Formulation business.

“Alkem had a positive impact of higher offtake of COVID-19 associated drugs in the recent past. The reduction in COVID-19 cases, coinciding with seasonal change, bodes well for a pick-up in the performance of Acute therapies. Accordingly, we expect ALKEM to deliver 15% CAGR over FY21-23 estimated in domestic formulation. Bunched-up Abbreviated New Drug Application launches over the next 12-15 months are expected to improve sales growth as well as profitability of the US business. We estimate 10% CAGR in United States sales over FY21-23 estimates. We remain positive on the back of robust growth in the domestic formulation business and improving profitability in the US segment. We reiterate our Buy rating at a revised target price of Rs 3,730 per share,” the broking firm has said.

The stock of Alkem was trading at Rs 3,170 on the NSE.

Disclaimer

The stocks mentioned above are taken from brokerage reports. 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

TCS:

Tata Consultancy Services from the house of Tata group is the top Information Technology company in India by revenue. The company’s history dates back to the year 1968 when it was started as a division of Tata Sons as a management and technology consultancy firm. As of now, the company’s services range from cloud, consulting, TCS interactive, Analytics and Insights, IoT, Blockchain, Enterprise Applications, Cognitive Business Operations, Conversational Experiences, Automation & AI, Engineering and Industrial Services and Cyber security among others.

For the Q4Fy21 quarter, the company recorded a 14.9% increase in consolidated net profit to Rs. 9247 crore versus Rs. 8049 crore in the same quarter during a year-ago period. Revenue at the IT major also came in higher at Rs. 43,705 crore in comparison to Rs. 39,946 crore in the year ago period, a 9.4% y-o-y increase.

TCS made its stock market debut in August 2004 at a price of Rs. 1076 and just 3-months ago on April 9 hit its 52-week high price of Rs. 3358.80 on the BSE.

– Market cap- Rs. 11.8 lakh crore

– LTP- Rs. 3200.25

– EPS- 87.67

– P/E- 36.5

– The company in the last 4 years has announced 3 buybacks of around USD6-7 billion which provides a support to its price and that has also helped in maintaining retail investors’ interest in the scrip.

– Stock Analysis: YoY returns-On a year on year basis, the stock of TCS given the closing price of Rs. 2072 on June 9, 2020 and LTP of Rs. 3200 today has provided a phenomenal return of 54%

Strong long term fundamental strength with an average Return on Equity (ROE) of 34.90%

Net Sales at the company has grown by an annual rate of 8.61%. TCS has a low Debt to Equity ratio (avg) at -0.36 times. The company’s annual sales of

High institutional holding at 23.51%.

Stock is in a mildly bullish territory.

Brokerage Recos

2. Infosys:

The Bengaluru based IT major was set up in the year 1981 and is currently the second leading IT firm after TCS in revenue. The company’s products and services include NIA – Next Generation Integrated AI Platform, consulting, Information platform, Finacle- i.e. part of EdgeVerve Systems, Panaya Cloud Suite and Skava among others.

Large deal wins: For the Q3 period of FY21, Infosys announced that the TCV of large deals stood at $7.1 billion, this was higher in comparison to all the deals won by TCS whose TCV came in at $6.8 billion. In the Q4 period of FY21 also, the company’s net profit surged 17.5% y-o-y to Rs. 5076 crore owing to large deal wins and increased digital adoption amid the pandemic.

Guidance: Infosys guided for double digit revenue growth of 12-14% in FY22 on the back of major deal wins from Google and Daimler AG. In FY21, it logged growth of 6.1 percent.

The company’s debt free balance sheet together with its potential to reap healthy cash flow is also in its favour. Experts see the stock of Infosys to provide multi-bagger returns over a period of time.

-M-cap- Rs. 6.03 lakh crore

-LTP- Rs. 1415.3

– EPS-45.41

-P/E- 31.17

– Stock Analysis: 1 year performance comparison- On June 9, 2020, the stock of Infosys closed at a price of Rs. 717 and considering today’s price of Rs. 1415, the 1-year return from the scrip has been 97%.

Strong long term fundamental strength with an average RoE of 23.9%

The stock has outperformed BSE 500 in the last 3 years.

Recos:

3. Tech Mahindra:

Pune-headquarterd Tech Mahindra is a subsidiary of the Mahindra Group and offers BPO and Information Technology Services. The company also caters to the telecommunication sector by providing IT enabled solutions.

For the quarter ended March of FY21, Tech Mahindra posted 35% year on year jump in net profit at Rs. 1081 crore. This was sequentially lower by 17% in comparison to Rs. 1309 crore in the December ended quarter.

The share price of Tech Mahindra may rise with the commercial launch of 5G services in India.

-M-cap: Rs. 1.01 lakh crore

-EPS- 45.71

-P/E- 23.02

– Stock’s performance year-on-year- On June 9, 2020, the scrip of Tech Mahindra closed at a price of Rs. 586 and hence considering today’s CP of Rs. 1052, the stock has yielded a return of 80%.

Conclusion:

Now as the blue-chip IT stocks are available at a cheaper valuation in comparison to their mid-cap peers, one can bet on them for both short term as well as long term investment to gain handsomely. Nifty IT index is currently trading above its 20-, 50- and 100-day moving average which is indicative of bullish sentiments going forward. In the near term, there is seen an upside of 3.5% in the index to 28,600. Furthermore, if held for long term, these IT stocks have the potential to generate multibagger returns.

Multibagger stock ideas to buy in India 2021

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.

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