Category: Personal Finance

Buy Globus Spirits with a target price of Rs 1,475

Globus Spirits is a positive stock, according to Edelweiss Wealth. The firm has set a target price of Rs. 1,475, which would represent a 22 percent increase over the current market price of Rs. 1212 a share. Globus Spirits (GBSL) is a major player in India’s alcohol beverage industry. With the introduction of premium price point Rajasthan Medium Liquor, GBSL has an industry-leading ROCE, which has improved dramatically over FY20-21.

According to the brokerage, investment thesis shows that GBSL is well-positioned to report a strong 27 percent earnings CAGR over FY21-24E on the back of I integrated operations with strategic geographic advantage, (ii) increased penetration of high-priced products in the Consumer business, and (iii) upside from doubling its distillery capacity to leverage the Ethanol Blending Programme (EBP).

Outlook and Valuation of Globus Spirits

“We initiate coverage on GBSL with a ‘Tactical BUY’ rating and a target price of INR1,475/share. Our valuation assigns 14.5x EV/EBITDA multiple to the Consumer segment and 7.2x FY23E EV/EBITDA multiple to the Manufacturing segment. At our target price of INR1,475/share, GBSL is trading at FY23E P/E of 18.5x and EV/EBITDA of 11.5x. Our EPS forecast implies FY21-24E CAGR of 27% translating into FY23E PEG ratio of 0.68x,” the brokerage has said.

Key beneficiary of favorable trends within sector

According to Edelweiss, GBSL is one of the primary benefactors of the government’s Ethanol Blending Program(EBP). By FY24E, the business expects to add 14 million litres to its ENA/Ethanol capacity, bringing it to 30 million litres, providing profitability clarity in the medium term. Product range expansion and greater penetration of premium price point items (medium liquor) within IMIL in its main states are expected to support GBSL’s Consumer segment growth.

Rating: BUY

Target Price: Rs 1,475

Upside: 22%

Buy Bharat Electronics with a target price of Rs 255

India’s finances and strategic options have been squeezed throughout the years due to the country’s status as one of the world’s top weaponry importers.

According to the brokerage, BEL is ideally positioned to profit from the defence industry’s indigenization drive. Because it (a) is the principal provider of strategic electronic assemblies and sub-assemblies, and (b) has a strong R&D team for regularly generating difficult goods, we feel the company checks all the boxes to be the preferred partner of India’s armed forces’ modernization effort.

Outlook and valuation of Bharat Electronics

“We believe BEL is the best play in India’s defence sector with strong order book of INR54,500cr, which provides healthy 15-18% revenue growth visibility over the next 2-3 years.

Further, we expect the company’s top line to be a beneficiary through (a) strong technological capability, (b) partaking in the modernisation drive of defence forces, (c) ‘Atmanirbhar Bharat’ initiatives via DPEPP, 2020, and (d) growing opportunities in exports and non-defence market. The stock is currently trading at 16x FY23E EPS. We expect healthy upside in the stock’s valuation on the back of strict financial discipline. Hence, we initiate ‘Tactical BUY’ on BEL with a target price of INR255/per share, valuing it at 20x on FY23E EPS,” the brokerage has said.

According to Edelweiss Wealth Research, Bharat Electronics Ltd (BEL), India’s largest DPSU, is ideally positioned to profit from these advantages. BEL has been able to move up the value chain because to its strong R&D setup. The organization has effectively moved from a component supplier to a system integrator during the previous few years. BEL now has a healthy order book of INR54,500cr due to industry tailwinds. This, combined with past financial discipline, gives a good growth outlook for the company’s top line and profitability in the next 2-3 years.

Rating: BUY

Target Price: Rs 255

Upside: 23%

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article.

What is the PLI scheme announced by the government?

The production-linked incentive scheme has been announced by the government for the auto industry, with an incentive outlay of Rs 259 billion, which is lower than the earlier proposal of Rs 570 billion. According to Emkay Global the scheme is aimed at supporting the manufacturing and adoption of electric/hydrogen fuel cell vehicles and the localization of advanced technology components. The PLI scheme, which will be effective from FY23, is likely to bring in fresh investments of over Rs 425 billion and incremental revenues of over Rs 2,300 billion in the five-year period.

Who are the likely beneficiaries from the PLI Scheme?

“We believe that existing OEMs, especially in 2Ws, could be negatively impacted by the faster EV adoption, owing to increased competition from startups like Ola Electric.

Ancillaries are likely to benefit from localization opportunities for both ICE parts and BEV/FCEV parts.

Key beneficiaries include: Sona BLW Precision Forgings, Minda Industries, Minda Corporation, FIEM Industries, Lumax Industries, Varroc Engineering, Endurance Technologies, Wabco and JTEKT India, among others.

Should you buy these stocks?

While the above stocks are likely to be beneficiaries, Emkay Global has not made any recommendations to buy these stocks. It’s always hard to figure out the extent of impact on any company’s bottomline, especially if the policy has just been announced. The problem right now is that the markets have run-up so sharply and so fast, it’s always a risk to buy into stocks now. Therefore, before brokerage make a recommendation, we wish to point out stocks are expensive with the Sensex having breached the 59,000 points mark. Also, with regards to the stocks that are beneficiaries there is no point in over exuberance unless a thorough analysis is done.

Disclaimer:

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. Caution needs to be exercised as stocks are subject to risks associated with the stock markets. Neither the brokerage nor Greynium has recommending buying the above mentioned stocks. What is highlighted is merely the beneficiaries from the government’s PLI scheme for the auto sector.

Buy Oil India for a price target of Rs 255, says Emkay Global

Emkay Global is bullish on the stock of Oil India and has recommended buying the stock with a price target of Rs 255, as against the current market price of Rs 210.

“We consolidate Numaligarh Refinery into Oil India with a revised Sep’22E SOTP target price of Rs 255, (previously Rs165 for Mar’22E). Oil India’s core outlook is positive with crude at USD70+ and gas prices on an uptick. We do not build in any output growth despite management’s optimism,” the brokerage has said.

Emkay Global believes that Numaligarh Refinery acquisition should have been 100% with the Assam govt allotted Oil India ‘sshare instead, the effective 69.6% stake is also material. Oil India stands to benefit from massive Numaligarh Refinery excise duty-driven earnings and its ongoing 3x capacity expansion, the brokerage believes.

“We bake in USD65 Brent/4.5 APM for the long term and value S/A using DCF now. Oil India should receive Rs 13-15 billion in annual dividends from Numaligarh Refinery and India Oil Corporation in the next 5 years; these, if up-streamed, could result in a 45%+ payout and a 7% yield at current market price. We Upgrade the stock to Buy from Hold,” the brokerage has said.

Buy Titan, says Sharekhan

According to Sharekhan, correction in gold prices, upcoming festive/wedding season and a shift to trusted brands will boost Titan’s jewellery sales in Q2/Q3FY2022 that would also boost margins sequentially.

“Titan will be one of the key beneficiaries of a structural shift by consumers towards trusted brands. Government’s announcement for compulsory hallmarking will reduce pricing premium between regional/small players versus large players such as Titan, which bodes well. The festive season has begun on good note with Onam seeing good jewellery sales in South India, also supported by recent fall in gold prices. Jewellers believe that the ongoing festive season and upcoming wedding season will boost sales in the coming quarters and drive up profitability and cash flows in the medium term,” the brokerage has said.

Price target of Rs 2,305 on the stock

Sharekhan has maintained a buy on the stock with a revised price target of Rs. 2,305. The stock is currently trading at 72.0x and 61.5x its FY2023E and FY2024E earnings.

“Any disruption in the jewellery business’ recovery due to a spike in COVID-19 cases followed by frequent lockdowns would act as a key risk to earnings estimates,” the brokerage has said highlighting the key risks to the targets. The shares of Titan Company were last trading at Rs 2,103 on the NSE.

Disclaimer

The above stocks are picked from the brokerage reports of Sharekhan and Emkay Global. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. Please consult a professional advisor.

1. Jubilant Ingrevia:

Research backed HDFC Securities is bullish on the scrip of life science products and innovative solutions company, Jubilant Ingrevia. The brokerage sets a target price of Rs. 950, implying gains of 21.73% from the current market price of Rs. 780.4 per share.

Technical indicators point to strength in current uptrend

The stock has broken out on the daily charts with higher volumes, views the brokerage firm. On the daily and weekly chart, the stock is forming bullish higher top higher bottom formation on. Short term trend of the Stock is positive where it is trading above its 5 and 20 day EMA.

RSI oscillator is placed above 60 and rising upwards that suggest strength in the current uptrend. Plus, DI is trading above -DI while ADX line is placed above 25, Indicating momentum in the current uptrend. In view of the listed technicals, HDFC Securities recommend buying Jubilant Ingrevia at CMP of 763 and average at 725 for the upside targets of 858 and 950, keeping a stop-loss at 690.

2. Polyplex Corporation:

The company has been given a target price of Rs. 1990, from the current market price of Rs. 1795.6 that means potential gains of 10.83 percent.

Polyplex is the fifth largest capacity of polyester film globally. The company’s produce includes both thin as well as thick PET film in varied thickness as well as surface properties.

Technicals

-The stock is showing bullish higher top higher bottom formation on the weekly chart

– Short term trend also looks good where it is trading above its 5,20 and 50-day EMA.

– Oscillators like RSI and MFI is placed above 60 and rising upwards, Indicating strength in the current uptrend.

– Plus, DI is trading above -DI while ADX line is placed above 25, Indicating momentum in the current uptrend.

– So, given the technicals listed out above the stock recommnends a ‘Buy’ on

Polyplex at CMP of 1623 and average at 1510 for the upside targets of 1805 and 1990, keeping a stop-loss at 1450.

3. BEML Ltd:

HDFC Securities is bullish on the defence PSU firm for a target price of Rs. 1624, implying gains of as much as 9.64% from the price level of Rs. 1481.

BEML is the largest defence, mining and construction and rail coach manufacturer in India.

Technical observations

The stock hit a 52-week high on March 9 and since then was in a correction mode and stopped near Rs. 1119 levels which also coincide with bullish trend level. Ob Monday, the stock broke from its consolidation phase with volumes.

“It also took multiple support of bullish trend line and resumed its upward momentum along with huge volumes. RSI 14 on the Weekly and Daily time frame has taken support of 60 level and now moving higher. +DMI & ADX is well placed above 25 level is observed on the weekly chart which indicates that bulls are in control. Primary trend of the stock has been bullish as stock has been forming higher tops and higher bottoms on the weekly charts. Stock is placed above medium to long term moving averages, indicating bullish trend on all time frames”, adds the brokerage firm.

Disclaimer:

The scrips listed out here are from the brokerage report of HDFC Securities and are not a solicitation to ‘buy’ in these share. Please consult a professional advisor before making any stock market bets.

GoodReturns.in

Investment

oi-Vipul Das

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Published: Thursday, September 16, 2021, 10:51 [IST]

Punjab & Sind Bank an Indian public sector bank has revised interest rates on its fixed deposit and savings bank deposits which are in force from 16th September 2021. The term deposit of the bank includes deposits like Recurring, Cumulative, Annuity, Reinvestment deposits, and Cash Certificates. As of now. Punjab & Sind Bank (PSB) allows 5 types of term deposit schemes to its customers i.e. PSB Recurring Deposit Account, PSB Fixed Deposits, PSB Tax Saver, PSB Flexi Savings Deposit Product, and PSB Swasth Bharat Scheme.

A term deposit account at PSB can be opened by individuals, sole proprietors, partnership firms, private and public limited companies, HUFs, specified associates, societies, trusts, Departments of Authority founded and managed by Government (Central or State), Limited Liability Partnership, etc. The most recent interest rates on fixed deposits and savings account of the bank are discussed below which you should have a look at before making an investment decision.

Story first published: Thursday, September 16, 2021, 10:51 [IST]