Category: Personal Finance

Buy Mastek for a price target of Rs 3840

The broking firm has set an upside target of Rs 3,840 on the stock of Mastek, as against the current market price of Rs 3,000.

According to Sharekhan, the company has cited that the deal pipeline in the UK public sector remains strong on the back of higher spends on transformation.

“Though the management expects a delay in deal closures in the UK National Health Service, overall order bookings would remain strong given digital adoption in other departments of UK government. Mastek has qualified for seven deals (size in the range of GBP 3- 15 million) in the GBP 800-million digital capability framework by UK National Health Service, some of them can be converted during Q4FY2022,” the brokerage has said.

Mastek aims to double its revenue over next three years, implying a strong 26% CAGR, which is ahead of our estimates. Further, the management aspires to achieve $1 billion in revenues by the second half of this decade, versus the current annual revenue run-rate of $281 million.

Sharekhan remains optimistic on Mastek

According to the brokerage, the company is progressing well in terms of deepening its relationship in existing customers in UK public sector, deal sizes and tenure, expanding presence in the US and integrated solutions.

“Over the last two years, there is a significant upward movement in EBITDA margins (to 21.2% in FY2021 from 14.5% in FY2020) and return ratios as well. We expect the US Dollar revenues and earnings to post a CAGR of 22% and 27%, respectively over FY2021-FY2024E. Net cash can be utilised for inorganic expansion. At current market price, the stock trades at a valuation of 26x/21x its FY2023E/FY2024E EPS, justified strong earnings growth potential and higher RoEs. Given a healthy balance sheet and healthy deal pipeline, we maintain a Buy on Mastek with a revised price target of Rs. 3,840,” the brokerage has said.

Buy, Nippon Life India Asset Management

Sharekhan is also optimistic on the stock of Nippon Life India Management. “With improved operating performance and stable market share of 7% over the past four quarters, we believe that can clock better earnings growth going ahead. Nippon India Life Management has performed reasonably well after its rebranding in 2019, gaining business traction and profitability, through a strategic focus on retail investors and a strong presence in B-30 cities. It has also reactivated more than 1,000 corporate accounts,” the brokerage has said.

Focus on retail investors aided by an extensive branch network bodes well for growth. Besides, the company intends to launch newer and attractive products going ahead, which is a further positive.

“We maintain a Buy rating on the stock of Nippon Life India Management India with a revised price target of Rs. 502. Stock has performed well giving year-to-date returns of 45%,” the brokerage has said.

Disclaimer

The above stocks are picked from the brokerage report of Sharekhan. 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.

Barring stablecoins, eight out of top 10 cryptocurrencies were trading lower at 9.30 hours IST. Solana tanked as much as 12 per cent, whereas Cardano and XRP gave up over 8 per cent each.

The global crypto market cap tanked up to 6 per cent to $2.02 trillion compared to the last day. However, the total crypto market volume gained as much as 4 per cent to $91.91 billion.

“The past 24 hours were relatively quiet for the cryptocurrency market. As institutional investors become more active progressing into the new week, we would likely witness more volatility. Crypto bluechips faced minor profit booking over the weekend,” said Edul Patel, CEO and Co-founder of Mudrex.

In the meantime, US officials are examining possible insider trading and market manipulation at Binance, Bloomberg News reported, potentially adding more heat to the cryptocurrency exchange that has become a target of regulatory scrutiny in many countries.

Choice of Pension Fund (PF) and Asset Allocation

When a subscriber joins NPS beyond the age of 65, he or she has the option of choosing between pension fund (PF) and Asset Allocation, with a maximum equity allocation of 15% and 50% under Auto and Active Choice, respectively. The pension fund can be modified only once a year, while the asset allocation can be adjusted two times a year. Below are the two investment options under NPS for subscribers over 65 years of age.

Auto Choice:

The maximum allocation to the equity asset class in (%) under this investment option is as follows:

Active Choice:

The limit on equity allocation is 50%, while the remainder of the asset classes is as follows:

Exit and withdrawal rules

Subscribers who join NPS after the age of 65 will be subject to the following exit rules:

Normal Exit shall be after 3 years: The subscriber must use at least 40% of the corpus to buy an annuity, with the remainder available for withdrawal as a lump sum settlement or withdrawal. If the corpus is equal to or less than Rs 5.00 lakh, the subscriber can then choose to withdraw the whole accrued pension fund in a lump sum.

Premature exit: Premature exit is defined as existing before the conclusion of three years. The subscriber is obligated to use at least 80% of the corpus for annuity purchase and the remainder can be withdrawn in a lump sum according to the premature rules under NPS. If the corpus is equal to or less than Rs 2.5 lakh, the subscriber can then choose to withdraw the whole accrued pension fund in one single amount or lump sum.

In case of death: In the event of the subscriber’s unfortunate death, the whole corpus will be reimbursed in one single payment or lump sum to the enrolled nominee.

Tax benefits under NPS

Under NPS a subscriber can receive a tax advantage under Section 80 CCD (1) up to a maximum of Rs. 1.5 lac under Section 80 CCE. NPS subscribers are eligible for an additional deduction of up to Rs. 50,000 for contributions in NPS (Tier I account) under section 80CCD (1B). This would be an additional tax benefit to the Rs. 1.5 lakh deduction provided under Section 80C of the Income Tax Act of 1961.

Except for the tax breaks provided under Section 80CCD, subscribers can withdraw funds from their NPS tier I account in part before reaching the age of 60 for specific cases where the amount is withdrawn up to 25% of the subscriber’s contribution is tax-free. The amount contributed for the purchase of an annuity, on the other hand, is completely tax-free.

The annuity benefit you get in subsequent years will be taxable. Only after the subscriber reaches the age of 60, up to 40% of the overall corpus withdrawn in lump-sum is tax-free under NPS Tier I account. Contributing in a Tier II NPS Account, however, does not offer any tax deduction.

How to open an NPS account?

By following the ways and steps mentioned below one can open an NPS account effectively.

By visiting POP-SP

Any Indian citizen between the ages of 18 and 70 can open an NPS account at any POP-SP. An individual can get a PRAN application form from any of the Point of Presence – Service Providers (POP-SP) filing which he or she can submit the form for account opening. He or she then must make sure that the form is duly filed without any error including passport size photograph, signature, PAN number, and other details such as KYC documentation such as proof of identity and proof of address.

To submit the duly filed PRAN application along with the KYC documents the individual needs to visit his or her local or nearest POP-SP. The CRA will deliver your PRAN card to your correspondence address. POP-SP will issue you a receipt number after you submit your PRAN application. The individual can verify the status of his or her PRAN application by visiting https://cra-nsdl.com/CRA/pranCardStatusInput.do. While submitting the request for registration with any POP-SP, the individual must make the initial contribution of Rs 500.

Through eNPS

Individuals can use PAN & Bank credentials to open an NPS account online by visiting eNPS. Bank/Demat/Folio Account details for KYC validation for subscriber registration by ENPS with the approved bank or non-bank. Based on your selection made throughout the registration procedure, the KYC of the individual will be verified by the Bank/Non-Bank POP. For more information, subscribers can click here.

Employee Provident Fund (EPF)

This monthly deduction from your salary towards EPF can help you build a large corpus for your retirement. Your investment in EPF has the potential to earn better returns when compared with any other debt investment, at the same time it is backed by the Government of India. A reasonable contribution in EPF can be treated as the debt allocation in your portfolio. It also helps you to avail tax benefits u/s 80C. There are options available with many companies where you can voluntarily invest in the provident fund along with the mandatory EPF deduction by the employer. Those who have outstanding liabilities like a home loan or need higher cash flow at the end of every month may opt for a minimum contribution towards EPF, else it is a good investment option from the long term growth and benefits perspective.

Public Provident Fund (PPF)

Just like EPF, this investment also falls under the debt asset class and is quite popular among investors. PPF is another long term investment that offers an attractive rate of interest along with the flexibility to invest the amount that you wish to avail tax benefit. The PPF account has lock-in for the first 15 years compared to EPF which can be withdrawn only in case of change of job or at the time of retirement. There are options that permit partial withdrawals from year 7 i.e. on completing 6 years of regular annual investments in PPF if required. This adds some more flexibility in PPF when compared to EPF.

Equity Linked Saving Scheme / Tax Saving Mutual Funds (ELSS)

ELSS falls under the equities asset class and offers the potential to generate higher returns compared to any other options. ELSS are offered by different mutual fund companies where these funds have a 3 years lock-in and as per the guidelines have to invest a minimum of 80% in the stock market. For investors who want to save tax at the same time invest in equity-oriented funds can certainly consider ELSS as this can work in both ways for them. ELSS also offers good liquidity because the lock-in period is just for 3 years, but it is advisable to hold ELSS investment for a longer period from a wealth-creation perspective. Since the investment is in the stock market, this option has one of the highest growth potential over a period.

Sukanya Samridhi Yojana

Sukanya Samridhi Yojana is a Government of India scheme that help parents of a girl child to save regularly for their daughter. The investment under this scheme at present generate 7.6% return per annum and also give the tax benefit u/s 80C. The investment can be done up to the age of 14 and the maturity will be at 21 years. This scheme can also be looked at as an objective oriented investment where the accumulated funds can be useful for daughter’s higher education or marriage.

National Pension Scheme (NPS)

NPS offer tax benefit u/s 80CCD allows you to save tax by making an additional investment of Rs.50,000. This is in addition to the limit of Rs.150,000 u/s 80C. NPS encourages people to invest in a pension account at regular intervals during their employment. Investments under NPS can be invested in equities and debt depending on the risk appetite of the investor. NPS investments you do are locked up to the age of 60 and you can withdraw a maximum of 60% of your corpus at that stage. You have to invest the remaining corpus in annuities which give you a monthly pension post your retirement.

To Conclude

Tax planning is important and there are different ways to save tax. These options have their benefits and you need to select them based on your needs and risk profile. ELSS can be instrumental in generating higher returns at the same time it does carry additional risk. This risk however gets reduced substantially if the investment is held for a longer period. Despite that, if you prefer not to take the risk and you are fine with reasonable growth then you may consider options other than ELSS. Another approach you may take is to create a blend of these options where you can take a limited risk and grow the overall investment at a better rate as well.

About the author:

Harshad Chetanwala, the author of the article is a co-founder of MyWealthGrowth. He is a Certified Financial PlannerCM with more than 19 years of experience in financial services and in the past have worked with companies like Quantum Asset Management Company, HDFC Securities & HDFC Standard Life Insurance.

In the past 18 years of his career, he has worked in multiple roles focusing on Personal Finance, Asset Allocation, Goal based investing, Mutual Fund, Equities, Debt and Insurance that help families to achieve their financial goals. He specializes in guiding investors on Financial Planning, Investment in Financial Assets & Gold, Mutual Fund Portfolios and Financial Protection.

In his previous stint at Quantum Asset Management Company, he has delivered talks at different platforms to empower the audience with knowledge on personal finance and investing. He strongly believes in creating financial awareness that lets families take control of their personal finances.

After the company paid an interim dividend, the company’s stock rose more than 3% in the morning session on September 20. For the last five years, the company has had no debt.

Bajaj Holdings said that at their meeting on September 17, the company’s Board of Directors declared an interim dividend of Rs 90 per equity share with a face value of Rs 10 for the fiscal year ending March 31, 2022.

On September 29, 2021, the record date for deciding which members are eligible for the interim dividend has been set. In an exchange filing, the company stated that the aforementioned interim dividend will be credited/dispatched on or around October 11th.

During its Annual General Meeting on July 22, 2021, Bajaj Holdings & Investment Limited (‘the Company’) declared a dividend of Rs. 40 per equity share, with a face value of Rs. 10 each, for the fiscal year ended March 31, 2021. After deducting the appropriate tax at the source, the abovementioned dividend was credited/ sent to shareholders on July 26, 2021.

Bajaj Holdings Dividend History

Since June 29, 2001, Bajaj Holdings & Investment Ltd. has declared 23 dividends. Bajaj Holdings & Investment Ltd. has declared an equity dividend of Rs 40.00 per share in the last 12 months.
This converts to a dividend yield of 0.88 percent at the current share price of Rs 4566.85.

Bajaj Holdings & Investment Ltd., founded in 1945, is a Large Cap firm in the Holding Company sector with a market capitalization of Rs 48,956.35 crore. The stock returned 43.57 percent over three years, compared to 55.35 percent for the Nifty 100 index.

Company details