Category: Personal Finance

Quant Active Fund

Quant Active Fund Direct-Growth is a modest fund in its category, with assets under management (AUM) of 1,051 crores as of 30 June 2021. The 1-year returns on Quant Active Fund Direct-Growth are 85.43 percent. It has returned an average of 21.98 percent per year since its inception.

The fund’s top 5 holdings are in Vedanta Ltd., State Bank of India, Reliance Industries Ltd., Fortis Healthcare (India) Ltd, ITC Ltd. The fund is ranked 5 star by CRISIL rating agency.

A three-year SIP of Rs 10,000 will yield a result of Rs7.25 lakh, with a profit of Rs 3.65 lakh. With a diverse portfolio of Large Cap, Mid Cap, and Small Cap companies, the programme strives to provide long-term capital appreciation and income.

Mahindra Manulife Multi Cap Badhat Yojana

The assets under control of Mahindra Manulife Multi Cap Badhat Yojana Direct-Growth have valued 721 crores (AUM). It has returned 77.42 percent in the last year. It has returned an average of 19.63 percent per year since its inception. Morningstar, Value Research and CRISIL have given the fund a four-star rating. A three-year SIP of Rs 10,000 will result in a profit of Rs 2.76 Lakh and a payout of Rs 6.36 Lakh

Through proper diversification and low risk on business quality, the scheme aims to generate medium to long-term capital appreciation. Mahindra Manulife Multi Cap Badhat Yojana has a NAV of 21.79 as of Sep 13, 2021.

Invesco India Multicap Fund

The fund invests in large, mid, and small companies’ stock and equity-related instruments in order to create long-term capital appreciation. The fund selects stocks throughout the market capitalization spectrum using a bottom-up investment technique.

The Invesco India Multicap Fund Direct-Growth manages assets of 1,573 crores (AUM). Returns during the last year have been 70.09 percent. It has returned an average of 20.29 percent per year since its inception.

A three-year SIP of Rs 10,000 will result in a profit of Rs 2.3 Lakh and a payout of Rs 5.9 Lakh

Kotak India Growth Fund

The assets under management of the Kotak India Growth Fund Series 4 Direct-Growth are approximately 82 crores (AUM). The program aims to create capital appreciation by investing in a diverse portfolio of equities and equity-related securities across a range of market capitalizations and sectors. Kotak India Growth Fund Series 4 Direct has a 1-year growth rate of 59.30 percent. It has had an average yearly return of 19.01 percent since its inception.

A three-year SIP of Rs 10,000 will result in a profit of Rs 2.71 Lakh and a payout of Rs 6.31 Lakh.

Advantages of Multi Cap Funds

The fund’s top 5 holdings are in ICICI Bank Ltd., Persistent Systems Ltd., Reliance Industries Ltd., HDFC Bank Ltd., State Bank of India.

4 Best Multicap Equity Funds Based On SIP Returns For Long Term Investment

Disclaimer

Given the way the markets have run up, if you are a mutual fund investor in general and are investing when the Sensex has crossed the 58,000-point level, you should adjust your expectations. Stick to Sips and Small Amounts Rather than Big Amounts, we recommend sticking to Sips and Small Amounts.

Before investing in mutual funds, you should speak with a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates, and authors take no responsibility for any losses or damages incurred as a result of the information contained in this article. Mutual funds are vulnerable to the dangers involved with the stock markets, so proceed with caution.

1. Vishnu Chemicals:

The brokerage bets on the stock of chemicals company for gains of up to 17.55% seeing a target of Rs. 818 from the last trading price of Rs. 695.9 per share.

About the company: Vishnu Chemicals Ltd (VCL) is India’s largest manufacturer of Chromium and Barium compounds. The company has a strong moat of being a low cost manufacturer and a leader in a niche industry, its products has varied applications across 20 sectors like Leather, Pharmaceuticals, Glass, Paints & Coatings, Tiles, Wood preservatives etc. The company’s clientele span 57 countries. The company also acquired Barium carbonate facility of Solvay Barium GMBH in India and entered the barium segment.

Rationale for bullishness on the stock

“Going forward, we are positive on the growth prospects of the company on the back of 1) Constant expansion of its product application across industries 2) Backward integration by setting up Soda Ash unit which is expected to be commissioned by Q4FY22 at a capex of Rs. 120Cr for Chromium chemicals which will be margin accretive 3) Incremental capacity expansion in Barium segment provides good visibility of future growth and 4) Post completion of investment phase in FY22, we expect VCL to generate strong cash flows which will aid in deleveraging its balance sheet and thereby improve its return ratios”, says the brokerage report.

“The brokerage expects the company’s revenue, EBITDA and PAT to likely record a growth of 16/36% and 51% CAGR over FY21-23E along with consistent FCF generation and improvement in working capital. Higher PAT growth will be driven by strong operating performance across both Chromium and Barium segments where we expect segment-wise EBITDA margins to expand by 600/400 bps respectively over FY21-23E. At a consolidated level, we expect overall margins to expand by 430 bps to 15.9% in FY23E v/s 11.6% in FY21. Also strong cash flows on the back of better operating performance will result in lower debt, aiding lower interest cost which will further be earnings accretive”, adds the brokerage.

The stock is currently trading at valuation of 10x FY23E earnings. We feel the base case fair value of the stock is Rs. 738 (11.5x FY23E) and bull case fair value is Rs. 818 (12.75x FY23E). We recommend investors to buy the stock in the band of Rs. 658-696 and further add at Rs. 593.

2. Nippon Life India:

HDFC Securities is positive on the AMC for gains of over 15% and sets a target price of Rs. 505 to be realized in the next 2 quarters. The stock last traded at a price of Rs. 436.8.

In existence since last 25 years, Nippon is a leading non-bank run AMC with a strong global parentage. Product launches keeping in view HNI as well as retail clientele has been its key area. Also, the margin accretive PMS and AIF business helps the company that yield in a higher return. The company’s debt funds have also been garnering investors after the company has got stringent with its debt portfolio mix.

“The brokerage envisages a rise of 15.5% CAGR for topline while PAT is expected to grow by 7.6% CAGR over FY21-23E. Operating margin is estimated to grow to 59% in FY23E compared to current 52.5%. Assets Under Management is expected to rise by 14% annually over same time frame. RoE is expected to hover around current level. Market share trend both in equity and debt segment will be the key thing to watch out for. Cash and investments of the company is Rs. 29,106 mn as at FY21 (~11% of the market capitalization). The company has been constantly paying healthy dividend to its shareholders”, adds the brokerage report.

The company advices investors can buy NAM India at the LTP of Rs.440 (35xFY23E EPS) and add on dips to Rs.390 (31xFY23E EPS) band for Base case fair value of Rs.478 (38xFY23E EPS) and the Bull case fair value of Rs.505 (40xFY23E EPS) over next 6 months. In terms of Mcap to AUM, NAM India is available at a reasonable valuation (7.9x FY23E P/AUM) as compared to other peers.

3. IPCA Lab:

The company sees this pharma player to gain up to 10% in the 2 quarter period and hit a target price of Rs. 2867, from the last traded price of Rs. 2596.15. The company’s key therapeutic areas include cardiac, Pain Management (Rheumatology), Anti-Malarial and Anti-Diabetic etc. The company’s constant endeavor in the direction of backward integration will provide it a cost advantage.

Re-rating of the stock can be seen in future

“Despite US FDA issues remaining unresolved, Ipca has managed to post strong performance in FY20 and FY21. It can be attributed to healthy growth from domestic business, export of APIs and UK business”, says the brokerage. IPCA continues to maintain leadership position in segments such as rheumatoid arthritis and orthopedic therapies in the domestic market. Export growth momentum is expected to sustain on the back of healthy growth in API segment in the international market. Timely resolution of import alert issued by the US FDA could provide additional uptick to revenue growth and profitability. Any favorable outcome from US FDA for its facilities would further rerate the stock.

HDFC Securities is positive on Ipca Labs on the back of: i) strong volume growth in domestic formulation across therapeutic areas, ii) cost competitive and consistent quality driving better business prospects in API segment, iii) robust debt free B/S with strong liquidity in the form of cash, liquid investments to the tune of around Rs 920cr as on June, 2021 and strong return ratios and iv) better traction in the international markets such as Europe and Asia. We feel investors can buy the stock on declines at Rs 2359 and add more on dips to Rs 2080 (20.5x FY23E EPS) for base case target of Rs 2664 (26.25x FY23E EPS) and bull case target price of Rs 2867 (28.25x FY22E EPS) over the next two quarters.

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Disclaimer:

The stocks are taken from brokerage report and is just for informational use and should not be construed for investment advice.

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Buy Minda Corporation with target price of Rs 148, says Axis Securities

Axis Securities has set a price target of Rs 148 on the stock, as against the current market price of Rs124, with a potential upside of 19%.

The Spark Minda group’s flagship company, Minda Corporation has a strong presence in all categories, including 2W, CV, PV, and Aftermarket, which accounted for 52 percent, 21 percent, 11 percent, and 16 percent of its FY21 sales, respectively.

“We expect Minda Corp’s profitability to improve over FY22-23E in the backdrop of its wide product basket, robust market share, consistent new product addition, and operating leverage. The company is expected to deliver excellent profitability growth by FY23E owing to the attributes such as improved content-per-vehicle as well as higher indigenous content. We value the company at 15x FY23E EPS to arrive at a target price of Rs 148, implying an upside potential of 19% from CMP,” the brokerage has said.

According to the brokerage, the migration to BS6 will benefit Minda Corp significantly, as its wire harness product (25-30 percent market share) would likely see tremendous demand in terms of both value and volume. We like the company’s growth storey, which is being driven by improving kit-per-vehicle value, exiting loss-making divisions, and the potential for an opportunistic inorganic acquisition by leveraging its cash-rich position.

Buy APL Apollo Tubes, says HDFC Securities

HDFC Securities has set a price target of Rs 2,226 on the stock, as against the current market price of Rs 1,865.

With a capacity of 2.6 million tonnes per annum (mtpa) and a pan-India presence, APL Apollo Tubes (APL) is India’s foremost structural steel tube maker. APL’s market share increased from 27% in FY16 to 50% in FY21, because to a robust distribution network, branding, customised and innovative product offerings, and capacity expansion.

“We expect APL’s revenue/PAT to grow at CAGRs 20%/34% over FY21-24E, led by healthy volume growth, margin expansion, reduced working capital, and reduced debt. We thereby initiate coverage with a BUY rating and a TP of INR2,226/share (based on 35x FY24E EPS). The multiple of 35x is based on the APL’s superior performance, operational efficiency and strong positive outlook going ahead,” the brokerage said in its research report.

“APL has successfully gained the mindshare of fabricators and architects, making its steel tubes their first option for applications,” according to the brokerage.

Buy Nazara Technologies with a target price of Rs 2,208, says Yes Securities

Yes Securities has set a price target of Rs 2,208 on the stock, as against the current market price of Rs 1,929.

Nazara is predicted to generate revenue of Rs11.4 billion in FY24, with a 36.0 percent CAGR from FY21 to FY24E. The stock could climb 20-50 percent from current levels due to the general gaming market craze, growing interest in platform businesses, and bright prospects for the gaming industry in India. In the next 12 months, our base case target price is up 23.8 percent.

“Given the long term uncertainty in this business, we initiate coverage with REDUCE Rating and target price of Rs 2,208 at EV/EBITDA(FY24E) of 25x, taking into account valuation multiples of global peers like Electronic Arts, Activision Blizzard, and Tencent Holding, (adjusted for 30% growth in Indian market compared to 12-15% growth in the US and Chinese gaming markets). The stock currently trades EV/EBITDA of 19.4x,” the brokerage has said.

According to Yes Securities, the number of Mid/Hard Core gamers is predicted to expand to 120 million by FY25 from 35 million in FY21, driving ARPU growth (currently $9/pa) through In-App sales.

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.

Pointers to note when investing in mid-cap funds

– Since mid-cap funds put money in companies that invest in not so mature companies, you need to have an investment horizon of at least 5-years to let the company mature and maximize returns for you.

– Market volatility should not nudge you to redeem your investment i.e. volatility in such schemes cannot be ignored.

– Past short term performance cannot be just factored in for deciding on the mid cap scheme to lap up for your investment. The best option shall be to look at such schemes in longer term horizons and also make out how they performed in different market cycles. Also, another factor that needs to be monitored is risk adjusted returns.

– Also, you should be choosing a scheme that just not only has the potential to give exceptional returns in the bull run but also can contain losses in volatile times.

– When picking a mutual fund, you should go for a mid cap fund that has at least a 5-year track record and refrain from betting on NFOs providing such a scheme.

– In the long run for maximizing your return from the mid cap mutual fund scheme can be lowest expense ratio, good long term performance as well as sound and good management team.

Top 5 Mid-Cap Funds You Can Start SIP Based On CRISIL, Morning Star And Value Research Rating along with minimum SIP amount

Rating agencies based on several factors and not just NAV rate mutual funds based on their performance etc. and these ratings can certainly be a good criteria to decide on your investments in mutual funds.

We wish to tell our readers that markets have gone-up significantly in the last few months and therefore, even if you are investing through SIPs, you need to be a little cautious. Do not invest large sums, as it could be a tad risky, given where the markets are.

Is The Timing Right To Invest In Mid Cap funds?

SIP investment does not need to be timed and the market dynamics help to average out the cost in the medium to long run. Nonetheless, markets are placed near all time high levels and there has been too fast a rally on the Nifty, which makes expert to foresee a correction on the headline indices going ahead. Now in such a situation one needs to be mindful of the inherent risk and talking specifically of the broader markets which have seen remarkable rally of late, volatility and correction is warranted. So, if you can stomach in the volatility and have a longer term horizon to maximise your returns from the investment, you can surely lap up one of the best rated mid-cap funds.

Disclaimer:

The schemes with high rating from rating agencies as well as their performance are listed just for information purpose and should not be construed as investment advice.

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India is a globally significant market for gold business, but interestingly India does not produce a considerable amount of gold that can meet huge domestic demands. India stands at the second position in terms of gold import globally, after China. The country imports gold in the form of gold bars, which is governed by the Reserve Bank of India (RBI), the central bank. Amid the pandemic, India has imported the precious metal worth $34.6 billion in the last fiscal, against $28.2 billion in the previous fiscal. This year too, India has increased its gold imports massively, although the prices are muted than earlier levels.

According to the latest Union Budget, gold now attracts 7.5% customs duty, which was a reduction from earlier 12.5%. Indians import gold in bulk and to keep the price in control FM Nirmala Sitharaman took the decision that has been implemented in this fiscal. However, India now imposes a separate 2.5% cess on gold.

Rules on who can import gold in India?

The list of entities that can import gold in India is notified by the Directorate General of Foreign Trade (DGFT). An individual of Indian origin having a valid passport can import gold, only after an issue of license by the DGFT. The list of entities, who can import gold in the domestic market, follows:

Metals and Minerals Trading Corporation Limited (MMTC)
Handicraft and Handloom Export Corporation (HHEC)
Project and Equipment Corporation of India Limited (PEC)
State Trading Corporation (STC)
MSTC Limited
STCL Limited
Diamond India Limited (DIL)
Gems & Jewellery Export Promotion Council (G&J EPC)
Star Trading House (only for Gems & Jewellery sector) or a Premier Trading House
Any other agency authorized by the RBI

For the consignments of the yellow metal, the importers have to submit the report of their utilization and proof of evidence to the Central Excise Office of India. The Central Board of Indirect Taxes and Customs (CBIC), Ministry of Finance ascertains the gold import regulations in India. This year, CBIC has exempted gold and silver imported under export promotion schemes from Agriculture Infrastructure and Development Cess (AIDC), in the public interest.

Returning Indians who have been out of India for more than 6 months and are returning home, can import gold but have to pay duty in the convertible foreign currency. Important banks like the SBI, including a few foreign banks, are also allowed to import gold and silver at the normal duty.

Restrictions on gold imports

Indian entities have to import gold in the form of gold bars, and the form of coins and medallions is prohibited by the RBI. Imports of the yellow metal should be routed through only custom bonded warehouses. One entity cannot import more than 10 kg of gold (including ornaments) per passenger. Entities under the SEZ and EOUs, Premier and Star Trading Houses are permitted to import gold only for exports, and not for any other purpose. No gold ornament studded with stones and pearls is permitted.

To import gold, entities can check schemes offered by the State Trading Corporation (STC) of India, a union government enterprise; STC imports gold of 100 gm and 1 Kg bars with 0.995 and 0.999 purity, for traders or jewellery manufacturers.

Which country is the largest gold exporter to India?

Switzerland, Saudi Arabia, and China are those countries to export a large amount of gold to India. In earlier years the middle eastern countries always remained the major source of India’s gold. However, Switzerland, in the last fiscal strengthened its position as India’s one of the most significant import partners because of increasing gold imports from the country and replaced Saudi Arabia to become the 4th largest import partner of India. Gold imported from Switzerland accounted for almost half of India’s total gold imports. On the other hand, Dubai, the gold city is also a significant place from where India imports gold.

Gold under the government reserve

Robust promotion of RBI’s Sovereign Gold Bond scheme, Gold ETFs, and digital gold purchases have muted the demand for physical gold only a bit. The increasing price of gold has influenced investors to focus on the long-term return from gold, and not only on gold ornaments. But in the case of digital gold or SGB, RBI has to store gold at their warehouses. So, to meet the increased demand, RBI has imported a record amount of gold from the foreign market. These golds are not imported by other entities but directly purchased by the RBI.