Personal Finance – Page 13

Cryptocurrencies tumble as coronavirus variant shakes markets, BFSI News, ET BFSI

November 27, 2021 root Personal Finance

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By Tom Wilson

LONDON -Bitcoin tumbled over 9% on Friday, dragging smaller tokens down, after the discovery of a new, potentially vaccine-resistant coronavirus variant saw investors dump riskier assets for the perceived safety of bonds, the yen and the dollar.

Bitcoin, the largest digital currency, fell as much as 9.2% to $53,551, its lowest since Oct. 10. The second largest cryptocurrency ether fell over 13% to its lowest in a month as investors ditched cryptocurrencies.

Bitcoin, whose 13-year life has been peppered by bouts of extreme volatility, was on track for its biggest one-day drop since Sept. 20. It has slumped by more than a fifth since hitting a record high of almost $70,000 earlier this month.

Scientists said the coronavirus variant, detected in South Africa, Botswana and Hong Kong, has an unusual combination of mutations and may be able to evade immune responses or make it more transmissible.

“The spread of (the variant), especially to other countries, could wither investor appetite further,” said Yuya Hasegawa at Tokyo-based exchange Bitbank. “BTC’s upside will likely be limited and the market should brace for further loss.”

Bitcoin hit an all-time high of $69,000 earlier this month as more large investors embraced cryptocurrencies, with many drawn to its purported inflation-resistant qualities.

Others have piled into the digital token on the promise of quick gains, a draw that has been heightened by record low or negative interest rates. Yet bitcoin’s volatility has lingered, drawing questions over its suitability as a stable store of value.

Ether was last at $3,924. It is down almost 20% from its record high hit on Nov. 10.

(Reporting by Tom Wilson; editing by Carolyn Cohn, Kim Coghill, William Maclean)

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Regulating cryptocurrency will make it another PayTM, BFSI News, ET BFSI

November 27, 2021 root Personal Finance

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There is much debate and speculation around the upcoming Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 that is one of the 26 new bills on the agenda of the Union government for the upcoming winter session of the Parliament that begins from November 29. Media reports say that the legislation will try to define cryptocurrency and any information like number, code, token that promises a price will be considered cryptocurrency. As per the reports, the Central government is also considering a ban on all private cryptocurrencies in the proposed bill. ETCISO spoke to a range of stakeholders, including the security agencies and cybersecurity leaders about the Crypto Regulatory Framework, the pros, cons, opportunities and risks.

“I feel a regulatory framework is a must, including the KYC of each investor, properly licensed exchanges that follow transparency, and a database of all credit and debit activities of crypto, otherwise this entire crypto currency world will be hacked and it will evaporate. This is a big grey area operation that provides anonymity and which is leading to the misuse of this beautiful product and technology. For the police, it is a big headache. Whom do we go to in case some heist occurs? There are currently fake exchanges, fake mining , fake wallets, etc. How to we authenticate and enforce?” says Professor Triveni Singh, SP, Cybercrime, Uttar Pradesh Police.

“The biggest issue with crypto is its misuse by criminals, nation-states and speculators. Any digital currency must be designed to be traceable, and remove risks from paper currency while replacing it. One physical rupee should be the same as one crypto rupee. If crypto currency is controlled, a major portion of the incentive to hack companies would go. Today, my guess is that criminals invest a lot of money in vulnerability and exploit research and may be more adept than even security firms,” says Lucius Lobo, Chief Information Security Officer at Tech Mahindra.

“Addition of a regulatory framework and tying it back to the financial transactions lifecycle to check for terror financing or illegal transactions should also be one of the vectors to bring in governance for crypto. And a common framework on minimum security controls and assurance framework for organizations in setting up such environment, complimented with required education and awareness for end users of the system on how to secure their crypto assets and credentials would be helpful,” adds Dilip Panjwani, Senior Director – Chief Information Security Officer (CISO) & IT Controller at Larsen & Toubro Infotech Ltd.

Money laundering using fiat money far exceeds misuse via crypto

There is a counterview to the opinion that cryptocurrencies have aided money laundering.

“I will disagree with this. Money Laundering using fiat money far far far exceeds misuse via crypto. But agree that KYC will help. But database of all transactions is already online and public on the blockchain,” counters a senior infosec leader.

Moreover, there are voices against such regulation as well.

“If we break its anonymity and control international transfers, as recommended by the RBI governor, It’ll just become another Paytm wallet. Here’s the problem. There’s no point of a distributed/ decentralised cryptosystem being controlled by one entity, for example, the RBI.

The entire reason for its immense popularity is “no control by any central authority” via it’s technical construct,” says another top cybersecurity expert on condition of anonymity.

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Should you invest in the ‘new’ international mutual funds?, BFSI News, ET BFSI

November 26, 2021 root Personal Finance

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The mutual fund houses are busy launching ‘exotic’ international funds. Nippon India Taiwan Equity Fund is the first Indian mutual fund to invest in Taiwanese market. Mirae Asset Hang Seng Tech ETF will focus on IT sector companies listed on the Hong Kong stock exchange. Motilal Oswal MSCI EAFE Top 100 Select Index Fund gives investors a chance to diversify across European markets. PGIM India Global Select Real Estate Securities Fund primarily invests in REITs and equity and equity related securities of real estate companies located throughout the world.

Most international funds in the country invest in US and UK. The new funds, at first glance, offers Indian investors a chance to diversify and invest in emerging markets and European markets. But does a regular investor need such exotic funds?

“Different markets have different risk and return profiles and offer opportunities which may not be available for investors in our domestic market,” says Siddharth Srivastava, Head, Products – ETF, Mirae Asset Management India. He explains further that there are two reasons behind investing in foreign markets. “First, Investors want to take a broad market exposure to a single country or a group of countries representing a region or a category. Secondly, Investors are now getting increasingly aware about various emerging and disruptive technologies and other themes and their future potential. They want to invest in portfolio’s which provides access to companies catering to such domains,” says Siddharth Srivastava.

A look at the international fund category will tell you that the basket has various different schemes. There are funds investing in USA to Chinese markets. Or they might be investing in commodities or tech or gold. Investors need to be cautious of the kind of schemes they are picking. Mutual fund managers say that the new age technology and the changing global scenario has led to the launch of different types of new global funds.

“Domains like FinTech, E commerce, Cloud, AI, Electric and Autonomous Vehicles, IoT, etc are gaining traction. While we have seen run-ups in several companies involved in above themes, still from a long-term point of view, they may provide significant potential for growth,” says Siddharth Srivastava.

Mutual fund planners and advisors say that the trends in global markets lead to the launch of new schemes. Retail investors need to add these funds to their portfolio only if their investment strategy aligns with these themes.

“Most of the international funds that are available at present for investors are US-based funds, hence the new funds do allow diversifying across different geographies and at the same time invest in companies of different sectors as well,” says Harshad Chetanwala, Founder, MyWealthGrowth, a wealth management firm, based in Mumbai. However, he says retail investors can consider having allocation up to 10% depending on their appetite and current portfolio.

“Within the international portfolio, investors can split between US and Non-US based funds. However, the first objective of investors should be to build a strong India based portfolio and then diversify in international funds. Invest in specific international funds only when you understand that market and its functioning or take help from a planner.” says Harshad Chetanwala.

The opportunities in the global market come with its own set of risks and potential rewards. While the correlation may reduce the risk of the overall portfolio, on the standalone basis, the product may be risky and may only suit investors with a high risk appetite. The investor gets additionally exposed to the regulatory, geo-political, currency risk among others. Investors must always remember this before investing.

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2 Top CRISIL Rated Infrastructure Mutual Funds To Start SIP In 2021

November 26, 2021 root Personal Finance

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What are Infrastructure Mutual funds?

Infrastructure mutual funds or schemes invest primarily in shares of companies in the power, construction, energy, capital goods and metals sector. The invested companies directly or indirectly participate in the infrastructure development of the country. These funds are the riskiest with exposure to just one sector i.e. herein infra sector. With no diversification, there is no element to cover the fall in case the sector faces some headwinds.

Importantly their direct plans also entail a higher expense ratio.

Top CRISIL Rated Infrastructure funds

1. BOI AXA Manufacturing & Infrastructure Fund – Direct Plan – Growth:

This CRISIL 5-star rated infrastructure sector fund invests mainly in shares of companies engaged in infrastructure-related activities or are expected to benefit from them. The fund launched in the year 2013 has since inception offered return of over 16 percent. This is a small fund with AUM of just Rs. 65 crore. Expense ratio of the fund is 1.49 percent.

For initiating a SIP in the fund, minimum investment of Rs. 1000 is needed while for lump sum investment one needs to put Rs. 5000. Rs. 10000 monthly SIP started in the fund 5 years ago with an investment corpus of Rs. 6,00,000 is currently valued at Rs. 10.88 lakh, while a lump sum investment of Rs. 1 lakh in the fund in 5 years has increased to Rs. 2.53 lakh.

Investors be mindful that you can put in your surplus into this fund category only if you have an investment horizon of at least 5 years and have the aptitude to interpret the macros.

Top stocks in the portfolio of this fund are L&T, Tube Investments, Ultratech Cement, Divis Lab, ABB India, Birla Corporation and NTPC among others.

2. Invesco India Infrastructure Fund-Direct Plan-Growth:

CRISIL has ranked this Infrastructure fund by Invesco Mutual Fund as 5-Star. The fund launched 8 years ago in 2013 has since inception given return of over 19 percent. The fund commands a sizable corpus within the category of Rs. 334 crore as on October 31, 2021.Expense ratio of the fund is at 1.46 percent.

In comparison to the benchmark S&P BSE India Infrastructure Index TRI S&P BSE India Infrastructure TRI, the fund has underperformed during a 1-period and offered return of 73.17 percent.

For SIP investment in the fund, you need to put in a minimum of Rs. 500. A SIP investment with Rs. 10000 per month started 5 years back is now worth Rs. 11.21 lakh, while the lump sum investment of Rs. 1 lakh made 5 years ago is valued at Rs. 2.61 lakh.

The fund’s portfolio includes stocks like L&T, RIL, Tata Power, GR Infra, Ambuja Cements, KEI Industries, Indraprastha Gas etc.

Infrastructure funds	Ranking	1-year Annualised SIP return considering NAV as on Nov 25, 2021	3-year Annualised SIP return considering NAV as on Nov 25, 2021	5-year Annualised SIP return considering NAV as on Nov 25, 2021
BOI AXA Manufacturing & Infrastructure Fund – Direct Plan – Growth	Crisil 5-star	55.66%	40.69%	24.66%
Invesco India Infrastructure Fund-Direct Plan-Growth	Crisil 5-star	66.24%	40.94%	25.99%

Should you invest in Infrastructure mutual funds?

Given the way the government is pushing infra development in the country, the sector offers immense potential. Also, we had seen some of the funds from the category doubling investors’ money in the last one year. Nonetheless, as past returns do not guarantee similar returns in the future, aggressive investor class with understanding of the macro trends looking at select funds for reaping higher return than other equity funds can park not more than 10% of their portfolio into this sectoral fund category.

Disclaimer:

In the story, we have listed the 2 top CRISIL rated infra funds and investors or readers should not construe it to be a recommendation to invest in these mutual fund schemes. Furthermore, infra sector funds being concentrated around infra theme are highly risky, so do your own due diligence before taking any investment call.

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LIC Bima Jyoti Policy: Should You Invest?

November 26, 2021 root Personal Finance

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Eligibility and sum assured under Bima Jyoti Policy

The Minimum Basic Sum Assured under the plan is Rs. 1,00,000, and there is no limit on the Maximum Basic Sum Assured, it will be in multiples of Rs. 25,000.

The Policy Term is 15 to 20 years. The Premium Paying Term is will be 5 Years less than the Policy Term. The Minimum Age of entry for the policy is 90 days, while the Maximum Age of Entry is 60 Years. On the other hand, the Minimum Age of Maturity is 18 years, whilst the Maximum Age of Maturity is 75 Years.

Calculation of Bima Jyoti Plan, considering the policy term is 15 years, hence the PPT is 10 years.

Basic sum assured	Age	Death sum assured	Guaranteed return at maturity	1st year premium with 4.5% tax (Yearly)	After 1st year premium with 2.25% tax (Yearly)
Rs. 2,00,000	30	Rs. 2,50,000	Rs. 3,50,000	Rs. 25,281	Rs. 24,736
Rs. 5,00,000	50	Rs. 6,26,000	Rs. 8,75,000	Rs. 65,044	Rs. 63,643

(Also read: LIC Jeevan Lakshya For A Promising Future Of Your Child)

Death Benefit

Bima Jyoti plan has a significant Death Benefit, that will secure the policyholder’s future even after his/her death. On death during the policy term before the date of commencement of risk, return of premiums will be paid excluding taxes, and the extra premium and rider premium(s), if any.

Additionally, on death during the policy term after the date of commencement of risk, “Sum Assured on Death” and Accrued Guaranteed Additions will be paid. Here, the “Sum Assured on Death” is defined as higher of 125% of Basic Sum Assured or 7 times of annualized premium.

Bima Jyoti Maturity Benefit

LIC officially mentioned, on Life Assured surviving the stipulated Date of Maturity provided the policy is in force, “Sum Assured on Maturity” along with Guaranteed Additions, will be paid, and the “Sum Assured on Maturity” is equal to the Basic Sum Assured.

According to LIC, “Loan can be availed under the policy provided at least 2 full years’ premiums have been paid and subject to the terms and conditions as the Corporation may specify from time to time.”

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SBI Vs DCB Vs Axis Vs IDFC First Vs Yes Bank: Latest Interest Rates On FD Compared

November 26, 2021 root Personal Finance

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State Bank of India

With effect from 08.01.2021, the State Bank of India is promising the following interest rates on retail domestic term deposits of less than Rs. 2 crores.

Tenors	Rates for Public In % (p.a.)	Rates for Senior Citizens In % (p.a.)
7 days to 45 days	2.9	3.4
46 days to 179 days	3.9	4.4
180 days to 210 days	4.4	4.9
211 days to less than 1 year	4.4	4.9
1 year to less than 2 year	5	5.5
2 years to less than 3 years	5.1	5.6
3 years to less than 5 years	5.3	5.8
5 years and up to 10 years	5.4	6.2
Source: Bank Website

DCB Bank

DCB Bank has recently revised its interest rates on fixed deposits and the new rates are in force from 22nd November 2021. The bank is currently providing the following interest rates on Resident Indian Fixed Deposits of less than Rs 2 crore.

Tenure	Rates for Public In % (p.a.)	Rates for Senior Citizens In % (p.a.)
7 days to 14 days	4.35%	4.85%
15 days to 45 days	4.35%	4.85%
46 days to 90 days	4.35%	4.85%
91 days to less than 6 months	5.05%	5.55%
6 months to less than 12 months	5.25%	5.75%
12 months	5.55%	6.05%
More than 12 months to less than 15 months	5.30%	5.80%
15 months to less than 18 months	5.50%	6.00%
18 months to less than 700 days	5.50%	6.00%
700 days	5.95%	6.45%
More than 700 days to less than 36 months	5.50%	6.00%
36 months	5.95%	6.45%
More than 36 months to 60 months	5.95%	6.45%
More than 60 months to 120 months	5.95%	6.45%
Source: Bank Website

Axis Bank

In the month of November, Axis Bank has also revised its interest rates on fixed deposits. The new rates are in effect from 10th November 2021. The bank’s most recent interest rates on domestic fixed deposits applicable to both regular public and senior citizens are as follows:

Tenure	Rates for Public In % (p.a.)	Rates for Senior Citizens In % (p.a.)
7 days to 14 days	2.5	2.5
15 days to 29 days	2.5	2.5
30 days to 45 days	3	3
46 days to 60 days	3	3
61 days	3	3
3 months	3.5	3.5
4 months	3.5	3.5
5 months	3.5	3.5
6 months	4.4	4.65
7 months	4.4	4.65
8 months	4.4	4.65
9 months	4.4	4.65
10 months	4.4	4.65
11 months	4.4	4.65
11 months 25 days	4.4	4.65
1 year	5.1	5.75
1 year 5 days	5.15	5.8
1 year 11days	5.2	5.85
1 year 25 days	5.2	5.85
13 months	5.1	5.75
14 months	5.1	5.75
15 months	5.1	5.75
16 months	5.1	5.75
17 months	5.1	5.75
18 months	5.25	5.9
2 years	5.4	6.05
30 months	5.4	6.05
3 years	5.4	6.05
5 years to 10 years	5.75	6.5
Source: Bank Website

IDFC First Bank

This private sector bank has also recently revised its interest rates on fixed deposits and the new applicable rates are in force from 23rd November 2021. On Domestic, NRE & NRO Deposits less than Rs. 2 Cr, IDFC First Bank is now providing the below listed interest rates to both regular and senior citizens.

Period	Rates for Public	Rates for Senior Citizens
7 – 14 days	2.50%	3.00%
15 – 29 days	2.50%	3.00%
30 – 45 days	2.75%	3.25%
46 – 90 days	2.75%	3.25%
91 – 180 days	3.25%	3.75%
181 days – less than 1 year	4.75%	5.25%
1 year – 2 years	5.25%	5.75%
2 years 1 day – 3 years	5.75%	6.25%
3 years 1 day – 5 years	6.00%	6.50%
5 years Tax Saver Deposit	6.00%	6.50%
5 years 1 day – 10 years	6.00%	6.50%
Source: Bank Website

Yes Bank

On deposits of less than Rs. 2 Cr maturing in 7 days to 10 years, Yes Bank is now promising the following interest rates w.e.f. 3rd November 2021.

Period	Regular	Senior Citizen
7 to 14 days	3.25%	3.75%
15 to 45 days	3.50%	4.00%
46 to 90 days	4.00%	4.50%
3 months to	4.50%	5.00%
6 months to	5.00%	5.50%
9 months to	5.25%	5.75%
1 Year to	6.00%	6.50%
3 Years to	6.25%	7.00%
Source: Bank Website

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7 Smart Ways to Reduce Your Debt

November 26, 2021 root Personal Finance

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1. Stop Accumulating Debt

Prevention is better than cure, you must have heard this many times. This goes the same here. Take a break from your credit cards or even freeze your card to reduce the temptation to take on extra debt. Prepare a budget to get an overview of all your expenses. A budget is surely a tool that could smartly tackle the debt. Knowing your expenses reduces your unwanted spending.

2. Increase your income

Increasing your income is the first and one of the smartest ways to reduce your debt temptation. The more revenue you put toward your debt, the sooner you’ll be able to eliminate it completely. Get yourself involved in putting some extra income which could help reduce your debt burden in the meantime.

3. Build an Emergency Fund

Building an emergency fund is another smart way of reducing the debt temptation. It sounds counter-intuitive but it is effective in reducing any potential debt. It allows your use in reducing the debt instead of touching your saving account. These savings offer you a safety net that you can utilize for unexpected needs, it also prevents you from going for your credit card.

4. Inquire with your Creditor for a lower interest rate

A higher interest rate does nothing but increases your debt hole because the interest amount goes towards the monthly interest charge making your actual balance higher. It is always to inquire your creditor (credit card issuers) for a lower interest rate. Interest rates are negotiable and asking for a lower interest rate could help you to reduce your debt. If you have a good payment history it is more likely to could get a power interest rate on your credit card.

5. Withdraw from your Retirement fund

Withdrawing from your retirement fund is another smart way to reduce your debt, but it should be your last option in the extreme case. It is highly recommended only in cases when you have no other option or you have other sources of income besides your monthly income. It is important to understand that Retirement fund withdraw could impact your saving post-retirement along with your interest, capital, and dividends, you could have earned from that money.

6. Debt Settlement

If you owe more than what you can repay in the set time period or your accounts are past the due date, debt settlement may be a good option to consider. In debt settlement, you ask your creditor to consider a one-time or lump-sum payment that is less than the whole total in order to settle down the bill completely. Creditors usually accept settlement proposals only on accounts that are in default or are about to default.

Debt settlement can have a negative impact on your credit score and should be utilized only as a last resort. Debt settlement could be also done by negotiating directly with the creditor. It’s a good option to negotiate directly or take the help of a reputable debt relief company.

7. Credit Counselling Agencies

It’s always good to take advice and suggestions when you lack ideas. Credit Counselling is one of the smartest ways to bring your debt in control. There are a number of credit counseling agencies that could help you in managing your finance and settling down your budget issues. These agencies are organizations or companies with a deep understanding of finance and credit issues.

All you need to do is send a lump-sum payment amount to the agency every month, and they will break it up and deliver it to your creditors on your behalf. Credit counseling differs from debt settlement in that it does not need you to be in default, and the aim is to pay off your debts in full.

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“BUY This Small Cap Stock For 26% Upside In 6 Months Suggests HDFC Securities

November 26, 2021 root Personal Finance

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Q2FY22 results of PCL

The brokerage has said that the company’s “Consolidated revenue grew by 17% YoY to Rs 215cr driven by higher realisation. However, on a sequential basis revenue growth was muted at 3.4% due to underperformance of the domestic market on account of staggered lockdowns. Company-wise Standalone (Precision Camshaft) revenue stood at Rs 120cr while subsidiary companies’ revenue for MEMCO/MFT/EMOSS stood at Rs 14/43/46cr respectively. EBITDA increased 56% YoY on account of lower raw material expenses. EBITDA margins expanded ~340bps to 13.7%. PCL reported a PAT of Rs 20cr against Rs 10cr in Q2FY21. Adjusting for exceptional items, PAT increased by 89% to Rs 8cr.”

According to HDFC Securities “PCL received compensation for the canceIlation of the order and sunk cost from a customer amounting to Rs 24.9cr offset partly by Impairment of property, plant & equipment amounting to Rs 11.8cr during the quarter. Company-wise Standalone (Precision Camshaft) EBITDA stood at Rs 21cr while subsidiary companies’ EBITDA for MEMCO/MFT/EMOSS stood at Rs 3.0/5.2/4.6cr respectively. Revenue from European operation increased 11% YoY to Rs 117cr and accounted for 55% of total revenue, down from 57% in Q2FY21. Domestic revenue grew 37/22% YoY/QoQ to Rs 70cr.”

The brokerage’s take on Precision Camshafts Ltd.

The brokerage in its research report has said that “The performance of Precision Camshaft Ltd (PCL) was impacted over the last few years due to a global slowdown in the automobile industry which was further complicated by Covid related disruption. The company also had to incur losses in its Chinese JV. The global recovery in automobile demand and improving performance of its subsidiary companies augur well for future growth. Although the adoption of EV could put a dent in the camshaft market, we believe mass adoption of EVs is still some time away and PCL would benefit from the rising demand of ICE vehicles till then. Nevertheless, the company has made strides towards participating in the EV opportunity by acquiring Emoss (its 100% owned European subsidiary), which produces and supplies electric drivetrains and has successfully demonstrated capabilities to retrofit in ICE based buses and other heavy vehicles.”

The brokerage has also stated that “Apart from this, it also offers high-end battery systems, fuel cells, range extenders, generators, power electronics and control systems suitable for different industries. Acquisition of MFT, a specialist in machined components has resulted in broadening PCL’s product portfolio and has given access to developed markets of Europe and North America. The group’s automotive component business is now well diversified in terms of product as well as customer base where no single customer contributes to more than 23% of revenues. The company is debt-free on a net basis with strong free cash flow generation which it can utilize for any inorganic growth opportunities.”

Buy Precision Camshafts Ltd. with a target price of Rs. 168

According to the brokerage’s call “We expect PCL’s revenue/EBITDA/PAT to grow at 16/31/173% CAGR over FY21-FY24, led by the increased demand from the domestic automobile industry and strong growth in the European business. We expect RoE to improve from 0.5% in FY21 to 8.6% in FY24. We believe investors can buy the stock in the band of Rs 143-146 and add on dips to Rs 125-128 band (22.5x Sep-23E EPS) for a base case fair value of Rs 157 (28x Sep-23E EPS) and bull case fair value of Rs 168 (30x Sep-23E EPS) over the next 2 quarters.”

Disclaimer

The stock has been picked from the brokerage report of HDFC Securities Limited. 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.

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‘Buy’ This Pharma Stock For 17% Returns: ICICI Direct

November 26, 2021 root Personal Finance

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Target Price

The Current Market Price (CMP) of Divi’s Laboratories is Rs. 4716 The brokerage firm, ICICI Direct has estimated a Target Price for the stock at Rs. 5600. Hence the stock is expected to give a 17% return, in a Target Period of 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 4716
Target Price	Rs. 5600
1 year returns	17.00%

Company performance

The pharma sector overall has performed quite well during the pandemic. The brokerage firms stated that Divi’s Laboratories had lower than estimated results in Q2FY22 as higher CS nullified by muted generics. The company’s sales were up 13.6% YoY to Rs. 1987.5 crore, while EBITDA in Q2FY22 was at Rs. 818 crore, up 10% YoY with margins at 41%. Consequent adjusted PAT was at Rs. 606.5 crore (up 16.7% YoY). ICICI Direct commented, “The company has been building capacities in a few more niche APIs as per the evolving demand scenario in the backdrop of ‘China plus one’ opportunities.”

Comments by ICICI Direct

According to ICICI Direct, “Divi’s share price has grown by ~3.9x over the past five years (from ~Rs. 1198 in June 2016 to ~Rs. 4716 levels in November 2021). Maintain BUY on the back of strong outlook both in CS and generics based on significantly high visibility CAPEX and customer stickiness.”

About the company

Divi’s is engaged in manufacturing generic APIs and intermediates, custom synthesis (CS) of active ingredients and advanced intermediates for pharma MNCs, other specialty chemicals like Carotenoids, and complex compounds like peptides and Nucleotide revenues. The company is progressing on the Kakinada greenfield project (planned outlay Rs. 1000-2000 crore).

Disclaimer

The above stock was picked from the brokerage report of ICICI Direct. 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.

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