Category: Personal Finance

Indian Oil Corporation

Motilal Oswal sees a whopping 53% gains on the stock of Oil Marketing Company, Indian Oil Corporation. Indian Oil reported a beat on our estimates, led by higher-than-estimated reported GRM marketing margins and marketing sales volumes, the brokerage has said.

“With the total phasing out of the COVID lockdowns and closure of refinery complexes (est 3mnbopd over the next 2–3 years), the refining margin would return to its long-term average (of USD5–6/bbl).

Consolidated debt declined further to Rs 857 billion in 1QFY22 (down 16% v/s end FY21). We maintain Buy, with combined FCF yield and dividend of 21-25% over FY22–24E. It trades at 6.1x consolidated FY23E EPS and 0.7 times FY23E price to book value the firm has said.”

According to the firm, Indian Oil has traded at a huge discount in the recent past decade owing to its capex cycle and CPSE-led liquidity. “We value it at 1.1x Sep’23 PBV, to arrive at price target of Rs 157 and maintain a Buy,” the firm has said.

Buy Sun Pharma

According to Motilal Oswal Sun Pharma’s earnings were well above its expectation, led by over 25% growth in all segments, except API. Steady traction in the Specialty portfolio, recovery in the core portfolio of Branded Generics, new launches in US Generics, and partial benefit of COVID-related products led to strong growth in 1QFY22 earnings. The brokerage has now decided to raise its owsn FY22E/FY23E earnings estimate by 5%/6% to factor in: a) continued ramp-up in Ilumya-led Specialty portfolio, b) addition of products in the Specialty portfolio, and c) strong COVID-related offtake, revival in core therapies, and healthy pace of launches in Domestic Formulation.

“We value Sun Pharma stock at 25x 12-months forward earnings to arrive at our price target of Rs 900,” the brokerage has said.

Buy Shriram Transport Finance

Motilal Oswal also has a buy on the stock of Shriram Trannsport Finance, with an upside of 15% on the stock.

According to the brokerage, while demand was weak over the last two years, strong signs of a demand revival was seen in 2HFY21. We expect this to continue into FY22 as well. “Over the last three years, the company has diversified into newer sources of borrowing, such as retail NCDs and ECBs. The share of ECBs in total borrowings has increased meaningfully to 21% (from 13% six quarters back). It was also able to tap the debt markets in the last four quarters. While demand was weak over the last two years, strong sign of a demand revival was seen in 2HFY21 and we expect this to continue in FY22 as well. We now model an assets under management CAGR of 12% for over Shriram Transport Finance FY21- FY24E.

Disclaimer

Investing in stocks 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. Please consult a professional advisor before taking any decision.

3 Stocks To Buy For Strong Returns, Says ICICI Securities

Buy Marico, Says ICICI Securities

Marico is a prominent FMCG company with products in the hair oil, edible oil, meals, and personal care categories.

In its most recent research, broking firm ICICI Securities advised investors to buy Marico stock.

According to the broking firm, Marico reported strong sales increase in the first quarter of FY22. Sales increased by 31.2 percent year over year due to robust volume recovery and price increase. However, the resulting PAT was Rs 365 crore (down 5.3 percent YoY).

Marico

According to ICICI Securities, Marico’s goal is to create 450-500 crore in sales with its digital-first brand by FY24. E-commerce channels have grown by 61 percent and currently account for 9% of all domestic sales. In both urban and rural areas, the general trade channel rose by 17%.

“Marico’s share price has given 84% return in the last five years. We roll over FY24 numbers with expectations of a full recovery in all segments and stabilisation of commodity prices. We continue to maintain our BUY rating on the stock Target Price and Valuation: We value the stock at Rs 630 on ascribing 50x FY24 earnings multiple”, ICICI Research has said.

“The company is leveraging its existing brands & tailwind in healthy foods habits to grow the category. We believe newer subcategories within foods, digital-only brands would be driving the growth for the company in the future. We remain positive on the company. We value the stock 50x FY24 earnings with the target price of Rs 630/share & BUY recommendation,” the brokerage has said.

Buy Shoppers Stop, Says ICICI Securities

Shoppers Stop (SSL) is one of India’s largest department stores, and it has undergone a number of structural changes with the goal of increasing its share of private label brands and expanding its beauty portfolio, as well as accelerating growth through digital channels and providing a better shopping experience through “personal shoppers.”

Broking firm, ICICI Securities has suggested buying the stock of Shoppers Stop with an upside target of almost 17% from the current levels.

Shoppers Stop

According to the brokerage, Covid induced lockdowns significantly disrupted the quarter but headline numbers beat consensus estimates. Revenue de-grew 70% QoQ to Rs 201.1 crore. The company achieved operational cost savings worth Rs 140 crore.

“The stock price has underperformed the broader indices over the last five years on account of weak SSSG, muted store addition pace and lower share of private label brands. With the new management team in place, we expect SSL to revive its revenue trajectory and margin profile. Reasonable valuations prompt us to be positive on the stock and maintain BUY Target Price and Valuation: We value SSL at Rs 310 i.e. 8x FY23E EV/EBITDA,” the broking firm has said.

Buy Oberoi Realty, Says ICICI Securities

The brokerage has set a target of Rs 830 on the stock of Oberoi Realty, as against the current market price of Rs 672.

According to ICICI Securities, ORL reported weak Q1FY22 results as expected. The company recorded a sales volume of 0.9 lakh square feet out of Q1FY21’s basis, but down 91 percent QoQ) owing to the second wave’s impact. The sales value was up 5.9 times year over year but dropped 91 percent quarter over quarter.

Oberoi Realty

“ORL’s share price has grown 2.2x over the past five years. We maintain our BUY rating on the company Target Price and Valuation: We value ORL at Rs 830/share,” the brokerage has said.

“While Q1FY22 was a washout, we expect sales momentum in FY22 to be as robust as FY21, driven by new launches in Thane and subsequent phases of Borivali/Goregaon. Thus, we maintain BUY with a revised target price of Rs 830/share,” the brokerage added.

Disclaimer

Investing in stocks 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. Investors should take care because the markets are near record highs.

Buy Nestle India: Sharekhan

Broking firm Sharekhan has said to buy the stock of FMCG major Nestle in its latest report. According to the broking firm, Nestle India’s Q2CY2021 performance was mixed with revenues growing 14%, while operating profit margins was flat at 24.4% (lagging its own as well as the street’s expectation of 25%).

Expectations of financials in years to come by Sharekhan

Target price of Rs 20,345 on Nestle India

According to Sharekhan, the domestic business of Nestle India maintained double-digit growth momentum at 13.7%, across all key categories seeing an improvement in sales.

“We expect Nestle India to take prudent price hikes and focus on efficiencies to mitigate the impact of input cost inflation in the quarters ahead. The company has invested Rs. 1000 crore of the planned investment of Rs. 2600 crore (including the capital expenditure) for improving growth prospects,” Sharekhan has said.

“The company will transfer Rs. 837.4 crore banked in its general reserve to retain earnings with effect from January 1, 2022 that can be utilised for higher payouts to shareholders in CY2022. Stock trades at 59.3/50.7x its CY2022/23E earnings. We maintain a Buy with a revised price target of Rs. 20,435,” the brokerage has said.

Shares of Nestle were last seen trading at Rs 17,725 on the NSE.

Buy Dalmia Bharat stock, says Sharekhan

Another stock that Sharekhan has a buy on is the stock of Dalmia Bharat. The brokerage sees a decent upside in the stock of this cement player.

Expectations of financials of Dalmia Bharat (Sharekhan estimates)

Price target of Rs 2,410 on the stock

According to Sharekhan, Dalmia Bharat has addressed its medium and long term growth plans through its decadal capital allocation plan which would ensure more predictable, sustainable and profitable growth path going ahead.

“The plan also addresses key issues such as transparency, corporate governance, treasury allocation and divestment of non-core assets which are key positive takeaways. The company would be focusing on achieving 14-15% RoCE over next few years and maintain balance sheet quality. We have marginally lowered our estimates for FY2022-FY2023 factoring lower Operating Profits Margin.

Dalmia Bharat stock is currently trading at an EV/EBITDA of 13x/11x its FY2023E/FY2024E earnings, which we believe leaves room for further upside considering its strong earnings growth trajectory over the next three years. Hence, we retain Buy with a revised price target of Rs 2,410,” the brokerage has said.

Disclaimer

Investing in stocks 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. Please consult a professional advisor before taking any decision.

IRCTC

The Indian Railway Catering and Tourism Corporation (IRCTC), which was founded in 1999, is the only entity permitted to sell railway tickets through both online and offline channels. It is the only company in the entire railway network that is permitted to sell water bottles. It is the only catering firm allowed to operate on Indian railways. Friends, as more people become engaged in travel, they will be in high demand in every area, including online tickets, water bottles, catering services, including internet catering, and the railway network’s chain of cafes and restaurants.

Because it is the sole entity that operates Indian railways, IRCTC has monopoly power. Investors flocked to the public offering when it was announced. The stock delivered 74.22% in a year, 59.87% in six months, 14.70% in a month.

For the past three years, the company has shown a good profit growth of 35.03 percent and the company has maintained a respectable ROE of 33.38 percent. With a healthy interest coverage ratio of 103.47, the company is in good shape.

• Share Price: Rs 2,331.30
• Market Cap: Rs 37,300.80 Crore

CDSL

CDSL (Central Depository Services limited). When you trade assets (such as stocks, bonds, ETFs, mutual funds, government securities, treasury bills, and so on), CDSL keeps track of your holdings and transactions in dematerialized form. In India, there are just two such companies: NSDL and CDSL. CDSL is preferred by many brokers over NSDL. The one reason is that it has 30% lower rates than NSDL.

CDSL is the market leader in this industry, with a market share of 59 percent. With three-year ROE of 14 percent and a healthy ROCE of 20.18 percent. The stock delivered 293.77% in a year, 172.77% in six months, 35.75% in a month.

• Share Price: Rs 1,331.45
• Market Cap: Rs 13,913.65 Cr.

CAMS

CAMS (Computer-Age Management Services) assists mutual funds with report maintenance, data administration, and registration and transfer agent services (RTA). CAMS has a 70% market share and a market capitalization of Rs 13800 crore. In the last five years, the mutual fund business has grown significantly. Four of the top five mutual funds are among CAMS’ mutual fund clients. CAMS has a distinct advantage because the entry barrier to this market is quite high, and replacing the company is extremely tough.

The stock delivered 133.8% in a year, 82.three% in six months, 17.31% in a month, and zero.

• Share Price: Rs 3,360.00
• Market Cap: Rs 16,311.39 Crore

IEX

The Indian Energy Exchange is the country’s major electricity exchange. It’s an online marketplace where buyers and sellers of electricity can exchange. It improves the electricity market’s accessibility and transparency, as well as the speed and efficiency with which trades are executed. The amount of spot power traded on the exchange is steadily increasing. As the pandemic fades, the country’s electricity demand continues to rise. However, this is another company that may be bought on the cheap for a long-term investment.

The company’s net profit climbed by 49.23% year over year, from Rs 42.1 crore to Rs 62.8 crore. The revenue grew every year, from Rs 257 crore in fiscal FY2021, to Rs 318 crore in fiscal FY2021. The stock delivered 145.43% in a year, 74.12% in six months, 13.26% in a month.

• Share PRice: Rs 431
• Market Cap: Rs 12,910.89 Crore

CONCOR

Indian Railways’ Container Corporation of India Limited is a totally owned subsidiary. CONCOR was founded in March 1988 under the Companies Act and began operations in November 1989, taking over Indian Railways’ existing network of seven inland container facilities. CONCOR (Container Corporation of India Limited) is a navratna firm owned by the Indian government, with promoters owning 54.8 percent of the company. It also constructs, maintains, and restores shipping containers. Conquer has its own terminals at 61 sites, making it a market leader in the transportation and logistics industry. The stock delivered 42.50% in a year, 41.82% in six months, -6.27% in a month.

• Share Price: Rs 643.95
• Market Cap: Rs 39,232.46 Crore

Multi Commodity Exchange of India

India’s first commodities derivative exchange is the Multi Commodity Exchange. It enables commodity derivative trades to be traded online. A wide selection of commodities can be traded with an MCX trading account. With a market share of over 92 percent in India’s commodities exchange sector, MCX has a near-monopoly.

The average daily turnover of commodities futures contracts climbed by 21% to Rs 28,031 crore in Q1FY2022, compared to Rs 23,129 crore in the previous year. In Q1FY2022, the company made a combined net profit of Rs 39.80 crore. The net profit CAGR for the last three years is 27.6 percent, which is impressive. The stock delivered -3.79% in a year, -0.15% in six months, 5.52% in a month.

• Share Price: Rs 1,603.25
• Market Cap: Rs 8,176.31 Crore

Conclusion

The stocks listed above are only intended to give you a general picture of what monopoly stocks in India are like. HAL, ITC, Pidilite, and Asian Paints are some of the other monopoly company stocks. Please conduct a fundamental and technical stock analysis before selecting these stocks for investment. This market structure, however, has some disadvantages. Due to a lack of competition in the industry, monopolists frequently operate inefficiently. Furthermore, price differentiation may be harmful to customers. Finally, before making any investments, speak with a financial counselor.

Buy Canara Bank, says broking firm Emkay Global

Broking firm, Emkay Global has suggested buying the stock of Canara Bank with an upside target of almost 30% from the current levels. The broking firm has revised the price target to Rs 185, as against the current market price of Rs 148.

According to the brokerage despite moderate credit growth and elevated provisions, Canara Bank reported a strong beat on net profits at Rs 11.7 billion, driven by strong margins, a one-off gain from the UB group stake sale and higher PSLC fees (seen across PSBs). Reported Gross Non Performing Assets improved 43 basis points, qoq to 8.5% due to contained slippages/higher upgrades.

“In our view, merger/asset quality related concerns are largely behind and the bank should report a gradual improvement in its RoA/RoE to 0.4-0.5%/10-11% by FY23E-24E (without factoring in dilution). Retain Buy with a revised target price of Rs 185 (from Rs 175), factoring in upgrades in earnings/multiple (core bank now valued at 0.6x vs. 0.5x),” the broking firm has said.

Buy ICICI Bank, Says Prabhudas Lilladhar

The brokerage has set a target of Rs 815 on the stock of ICICI Bank, as against the current market price of Rs 677.

According to Prabhudas Lilladhar, ICICI Bank operationally reported in-line performance with net profits of Rs 46.2 billion with a strong Net Interest Income growth of 18% YoY (best in industry) followed through a strong core PPOP growth of 23% YoY. The small setback was on higher slippages of Rs 72.3 billion (annualized 4% of loans) given the severity of wave two of covid 19.

“Strong franchise strength is reflecting in strong growth path both in liabilities & assets with much better managed risk which keep Return On Equity to move towards 15-16% in FY23. Maintain conviction BUY with revised target price of Rs 815 (from Rs 750) based on 2.4 times Sep-23 anticipated book value (rolled from March 2023) and subs value of Rs 181 (from Rs 164),” the brokerage has said. Shares of ICICI Bank were last seen trading at Rs 682.

Buy IndusInd Bank

Prabhudas Lilladhar has also suggested buying the stock of another banking major, IndusInd Bank. The bank saw savings account deposit strong with Rs 88.6 billion of incremental accretion, highest in the first quarter. IndusInd Bank’s earnings of Rs 9.75 billion (PLe: Rs 9.97 billion) was largely in-line with Net Interest Income growth of 8% YoY in line with loan growth, better fees & and a relatively elevated but flat provisions.

“Strong PCR of +70% and 100bps of COVID related provision cushions balance sheet impact and bank has managed the pandemic quite well. We retain BUY with revised price of Rs 1,280 (from 1,195) based on 1.7 times Sep-23 ABV (rolled from Mar-23),” the brokerage has said.

According to Prabhudas Lilladhar, the bank has built in segmental granularity in retail-corporate with slower growth and selling down exposures. Granularizing book has been completed and has started seeing strong growth in certain segments like large corporate & commercial banking. Retail disbursements were down 25-35% in Q1FY22 quarter on intermittent lockdown and are improving in Q2FY22. On deposits side, Current and Savings Account grew by 33% YoY/5% QoQ with ratio at 42% and further aspiring to improve towards 45%.

Shares of IndusInd were last seen trading at Rs 981.

Disclaimer

Investing in stocks 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. Investors should take care because the markets are near record highs.

3 Best Equity Mutual Fund SIPs To Consider In 2021

ICICI Prudential Value Discovery Fund

Value research and Morningstar have given this fund a 4-star rating. The 1-year returns for ICICI Prudential Value Discovery Direct-Growth are 53.81 percent. It has returned an average of 17.76 percent per year since its inception. This is an equity mutual fund that invests in value stocks.

A SIP started 3-years ago in ICICI Prudential Value Discovery Fund for Rs 10,000 every month is worth Rs 5.55 lakhs today. With a minimal investment of Rs 1000, investors can begin a SIP in the ICICI Prudential Value Discovery Fund.

ICICI Prudential Value Discovery Fund has holdings in Sun Pharmaceutical Inds. Ltd., Bharti Airtel Ltd., Mahindra & Mahindra Ltd., National Thermal Power Corp. Ltd., ITC Ltd. Redeem your units before the one-year time has passed, you will be charged a 1% load fee.

ICICI Prudential Bluechip Fund

ICICI Prudential Bluechip Fund Direct-Growth is an ICICI Prudential Mutual Fund Large Cap mutual fund plan. The ICICI Prudential Bluechip Fund is an open-ended equity fund that primarily invests in large-cap equities. Because it invests in bluechip stocks, which are market leaders in their respective industries, the program gives growth and stability to your portfolio. Value research and Morningstar have given this fund a 4-star rating.

ICICI Prudential Bluechip Fund holdings are in Infosys Ltd., ICICI Bank Ltd., HDFC Bank Ltd., Axis Bank Ltd., Reliance Industries Ltd.

A SIP started 3-years ago in ICICI Prudential Bluechip Fund for Rs 10,000 every month is worth Rs 5.12 lakhs today.

ICICI Prudential Sensex Index Fund

ICICI Prudential Mutual Fund’s ICICI Prudential Sensex Index Fund Direct-Growth is a Large Cap mutual fund program. The assets under management (AUM) of ICICI Prudential Sensex Index Fund Direct-Growth is 280 crores. The fund’s expense ratio is 0.17 percent, which is lower than the expense ratios charged by most other Large Cap funds.

ICICI Prudential Sensex Index Fund Direct has a 1-year growth rate of 40.70 percent. It has had an average yearly return of 14.32 percent since its inception. The majority of the money in the fund is invested in the financial, technology, energy, FMCG, and construction industries.

A SIP of Rs 10,000 per month in the ICICI Prudential Sensex Index Fund started three years ago is now worth Rs 5 lakhs.

Disclaimer

The opinions and investment advice offered by Greynium Information Technologies’ authors and employees should not be taken as investment advice to purchase or sell stocks, gold, currency, or other commodities. Investors should not make any trading or investment decisions solely on the basis of the information presented on GoodReturns.in. We are not a licensed financial counselor, and the information provided here does not constitute investment advice.

Please keep in mind that mutual fund investing is risky, and investors should proceed with caution. Please conduct thorough research. Neither Greynium Information Technologies nor the author are liable for any losses incurred as a result of reading this article.