Category: Personal Finance

Welspun India

Welspun India is among the world’s leading Home Textile solution providers. Broking firm Sharekhan has suggested buying the stock with a price target Rs 170, against the current market price of Rs 133.35

The company registered strong all-round performance on the back of strong international demand and low base of Q1FY2021. Revenue and operating profit grew by 84%/100% y-o-y, respectively, in Q1FY2022; PAT grew by 4.1 times.

Sharekhan estimates of Financials of Welspun India- Rs crores

Reasons why Sharekhan is betting on Welspun India

The brokerage has revised upwards its earnings estimates for FY2022/FY2023 by 5.6% and 8.9%, respectively, to factor in higher-than-expected margins to incorporate the benefits of no-change in rate of RoSCTL scheme and higher sales volume from the home textile business.

“Market share gains in the home textile market in the US, higher demand from retail clients of Europe/UK coupled with strong growth in B2C business will drive the core home textile business in the near to medium term. Emerging business (including flooring) will add substantially to revenue over the next two to three years. Further, European Union removing GSP status of Pakistan can provide a level-playing field for domestic players. The stock is currently trading at 14 times its FY2023E earnings. We maintain our Buy rating on the stock with a revised target price of Rs 170,” the brokerage has said.

Maruti Suzuki

Sharekhan also has a buy on the stock of broking Maruti Suzuki and expects expect strong volume recovery ahead, which would improve revenue and profitability. The brokerage has set a price target of Rs 8587 and has placed a buy call on the stock of Maruti Suzuki.

Sharekhan estimates of Financials of Maruti Suzuki- Rs crores

Maruti Suzuki: Strong growth ahead

According to Sharekhan the company is likely to benefit from buoyant passenger vehicles demand, driven by rising demand in tier-2 and tier-3 cities and rural areas. “Maruti Suzuki is expected to sustain its dominant market share, aided by strong product portfolio and position, brand appeal, and ability to frequently launch new models,” the brokerage has said.

According to Sharekhan the company’s strong distribution network in the passenger vehicle segment and rural penetration are likely to drive strong revenue growth going forward.

“Maruti Suzuki would benefit from operating leverage, driven by robust volume growth. We expect its earnings to post a 40.4% CAGR during FY2021-FY2023E, driven by a 21.9% revenue CAGR and a 350-bps improvement in EBITDA margin. We expect Return on Capital Employed to improve to 16.8% in FY2023E from 13.6% in FY2020. We maintain our Buy rating on the stock with an unchanged price target of Rs. 8,587,” the brokerage has said.

Birlasoft Ltd

Birlasoft Ltd provides digital and information technology consulting, services, solutions and products for organizations across industries, worldwide. Sharekhan has maintained a buy on the stock with a price target of Rs 500, against the current market price of Rs 408 on the stock.

Birlasoft estimates by Sharekhan in Rs

Buy the Birlasoft stock, says Sharekhan

According to Sharekhan, the management optimistic of a 15% y-o-y revenue growth in FY2022E, led by healthy deal pipeline, decent deal wins and strong growth in top accounts; EBITDA margin to sustain in Q2 despite wage revisions.

“We expect revenue and earnings to clock a 15% and 29% CAGR respectively over FY2021-FY2023E. We prefer stock given its healthy net cash balance and improving return ratios. We maintain a Buy on Birlasoft with a revised target price of Rs. 500, given its strong earnings growth potential, robust deal pipeline and strong demand environment,” 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 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.

Invesco India Midcap Fund

This fund is rated as 5-star by CRISIL. As the name suggests it is heavily invested in midcap stocks and hence a fall in the markets could make it a risky proposition.

Returns from Invesco India Midcap fund

Other details of Invesco India Midcap fund

Invesco India Midcap Fund: Good for risk averse investors

Invesco India Midcap Fund is good for those looking for SIPs, and willing to take substantial risks. Investors can start an SIP in Invesco India Midcap Fund with a small sum of Rs 1000. Invesco India Midcap fund has holdings in stocks like Gland Pharma, Endurance Technologies, Vinati Organics, Bharat Electronics, Gujarat Gas etc.

One can opt for the dividend as well as the growth plan under the scheme. The fund is well invested with 97.3% now in stocks, while the remaining is being held in cash. This fund is suitable for those willing to take a long-term view of things.

Our own belief is that the stock markets are overheated at the moment and the next 3-year returns are unlikely to be like the past, given that the markets have been scaling historic peaks.

Canara Robecco Bluechip Fund

This fund has been rated 5-star by several leading analysts and research agencies. It has been a consistent performer all these years. Let’s take a look at the performance of this fund.

Returns from Canara Robecco Bluechip Fund

Other details of Canara Robecco Bluechip Fund

Canara Robecco Bluechip Fund: Do not invest a big amount in SIP

We suggest that you start with a small sum by way of SIP. At 53,000 points on the Sensex, the chances of the markets falling are brighter, than rallying significantly. We advocate a small sum now and when the markets fall, you can increase the amount of SIP. That would be a great strategy to adopt. Canara Robecco Bluechip Fund has investments in stocks like HDFC Bank, ICICI Bank, Infosys, Reliance Industries etc. Investors who have a long-term view should begin with small amounts.

This fund has investments in largecap stocks and almost 93.9% of the funds are invested. The fund is an open ended fund with a net asset value of Rs 38.51 under the growth plan and assets under management of a pretty decent Rs 3,308 crores.

Disclaimer

Please note, investing in mutual funds is risky and investors should exercise caution. Please do adequate research. Neither Greynium Information Technologies, nor the author would be responsible for losses incurred based on the above article.

* Users in Germany, the Netherlands, Italy immediately affected

* Binance has been under concerted regulatory pressure (Adds context, Binance comment)

LONDON, – Major cryptocurrency exchange Binance said on Friday it would wind down its futures and derivatives products offerings across Europe, the latest move by the platform as pressure grows from regulators across the world.

With immediate effect, Binance users in Germany, Italy and the Netherlands would be unable to open new futures or derivatives products accounts, the exchange said in a statement on its website.

Increasingly worried over consumer protection and the standard of anti-money laundering checks at crypto exchanges, a string of regulators across the world – including Britain, Germany, Hong Kong and Italy – have in recent weeks ratcheted up pressure on Binance, one of the world’s largest exchanges by trading volumes.

“The European region is a very important market for Binance, and it is taking proactive steps towards harmonizing crypto regulations, which is a positive sign for the industry,” the exchange said on Twitter https://twitter.com/binance/status/1421033044337729536.

“We understand that many regulators at local levels may have their own positions on crypto, and we welcome the opportunity to engage in a constructive dialogue on local requirements.”

Users in the three countries will, from a date to be announced later, have 90 days to close any open derivatives positions, Binance said.

Germany’s regulator BaFin declined to comment on Binance’s move.

REGULATORY PRESSURE

Binance’s exit from derivatives in Europe is its latest exit from specific crypto products after growing regulatory pressure.

Malaysia’s securities regulator became the latest watchdog to target Binance on Friday, reprimanding it for illegally operating a digital asset exchange https://www.sc.com.my/resources/media/media-release/sc-takes-enforcement-actions-on-binance-for-illegally-operating-in-malaysia in the country.

It was not immediately clear how big Binance’s derivatives business in Europe was, though UK researcher CryptoCompare said in June it was the largest derivatives exchange with volumes of $1.7 trillion, down around 30% from a month earlier.

Binance CEO Changpeng Zhao said this week he wanted to improve relations with regulators, adding the exchange would seek their approval and establish regional headquarters.

On Monday, Binance said it would stop offering cryptocurrency margin trading involving the Australian dollar, euro and sterling.

Earlier this month, it said it stopped selling digital tokens linked to shares, after regulators cracked down on the cryptocurrency exchange platform’s “stock tokens” offerings.

Bitcoin was on Friday morning down 3.4% at $38,674.

Market players said the move may contribute to wider concerns about the future of cryptocurrency derivatives trading for retail players.

“A huge amount of money in crypto markets is floating around exclusively because of the existence and availability of such products,” said Joseph Edwards of Enigma Securities, a cryptocurrency broker in London.

“Binance have crowded out large sections of the derivatives market over the last couple of years – if their retreat from said market deepens, the medium-term impact is unlikely to be positive.”

1. NACH will enable you to get salary and other credits even on banking holidays:

National Automated Clearing House will now be available 24*7 irrespective of the bank holiday or weekend and hence people will be able to get their salary, pension as well as other debits in relation to various investments can be made even on bank holiday. In the current regime, NACH is only available on the bank working days.

2. ATM transactions to become expensive:

The banks as per the recent ruling of the Reserve Bank of India may increase the interchange charge at ATMs by as much as Rs. 2. The interbank charge can be increased from Rs. 15 to Rs. 17 in respect of financial transactions as well as to Rs. 6 from Rs. 5 for non-financial transactions. This interbank fee is charged by banks to merchants that process payments using the debit or credit card.

3. Free ATM transactions capped:

From one’s own bank’s ATM, the number of free ATM transactions have been capped at 5. At other bank’s ATM, the number of free ATM transactions vary depending on the city, in case of a metro city the free transactions allowed using other bank’s ATM is 3 and that at a non-metro city is decided at 5.

4. Loan and fixed deposit rates may see a change:

As growth is on the radar of the RBI and the centre, it is unlikely that the interest rates shall be tinkered with in the upcoming monetary policy scheduled from August 4-August 7, nonetheless nothing can be said with certainty till we get to hear the policy statement by the RBI’s Governor.

5. ICICI Bank’s new rules on ATM transactions as well as chequebook:

For up to 4 transactions, ICICI Bank charges no fee and post this on each of the transaction there shall be levied a fee of Rs. 150 after the free limit is exhausted. In a year, one can avail ICICI Bank’s cheque book with 25 leaflets for free but thereafter for every cheque book with 10 leafs there shall be a charge of Rs. 20.

6. LPG prices may be revised:

LPG prices are revised on a month on month basis and it is likely that LPG cooking gas rates may trend higher in the new month.

7. Form 15CA/15CB filing deadline extended:

Amid the coronavirus pandemic, the CBDT has allowed relief to taxpayers and extended the deadline for filing form 15CA/15CB, the deadline of which is ending on August 15. Form 15CA/Form 15CB are the IT department mandated filing requirement for any foreign remittances made.

8. Penalty on self assessment tax on dues over Rs. 1 lakh shall apply from August

Even as the centre extended a host of relief in tax compliance, a release in May provided that if an individual’s tax dues after considering TDS deduction and advance tax dues are over Rs. 1 lakh for the financial year 2021 then payment needs to be tendered on or before July 31, 2021. Failing which there will be levied a penalty at the rate 1% per month from August 2021 as per section 234A of the Income Tax Act 1961.

In case of senior citizens who are not needed to pay advance tax and if they happen to pay any tax before such deadline i.e. July 31, 2021 then such a payment shall be deemed as advance tax payment. And now if because of it, the final liability is less than Rs. 1 lakh then penal interest shall not be levied under section 234A.

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1. Quant Infrastructure Direct Plan:

Value Research and Morning Star has accorded this sectoral or thematic fund a 5-Star rating. NAV of the fund as on July30 is 18.331 and the fund in comparison to category average carries a higher expense ratio of 2.15%. Fund size of the mutual fund scheme is Rs. 42.67 crore as of June 30, 2021.

The scheme by Quant Mutual fund came into existence in 2013 and since then has given a return of over 15%. Benchmark of the fund is Nifty Infrastructure TRI. The risk-o-meter defines it to be placed in the high risk category.

Minimum SIP investment in the fund can be made for Rs. 1000. In a 1-year timeframe, the fund has provided outstanding return of 122.95%.

SIP of Rs. 10000 started 3 years ago, accumulating to an investment of Rs. 3.6 lakh is now worth Rs. 7.21 lakh.

Top holdings of the fund include Union Bank, Vedanta, ICICI Bank, Coal India, Bharti Airtel, Tata Steel, India Cements, L&T among others.

The fund is being managed by Ankit A Pande since May 2020.

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

This fund enjoys the highest rating by all 3 major rating agencies i.e. 5 Star rated fund by CRISIL, Value Research as well as Morning Star. The fund’s assets under management are at a good Rs. 179 crore and also its expense ratio is slightly above the category average at 1.46%.

In a 1-year time frame, this fund has underperformed the BSE India Infrastructure Index TRI and provided a return of 76.7%. The fund came into being in the year 2013 and since then has offered a return of over 18%.

Exit load applies in the scheme and is as following;

For units in excess of 10% of the investment,1% will be charged for redemption within 365 days

Note SIP in the fund can be started for as less as Rs. 500 and for lump sum investment one needs to shell out Rs. 1000.

Top holdings of the fund are L&T, Indraprastha Gas, Ultratech Cement, Bharat Electronic, KNR Constructions among others.

The fund is being managed by Amit Nigam since September 2020.

Top Rated and Top performing Infrastructure Mutual funds:

Points to remember when investing in sectoral funds like infrastructure

This is a wholly equity oriented scheme and that too concentrated around a particular sector and hence highly risky bet. To reduce the risk as well as lessen the impact of volatility one needs to be investing in these funds for a minimum of 5 years time horizon to reap optimal gains. and that is the main reason for their high risk. For an aggressive investor class person even allocation of not over 10% into this asset category is suggested.

Disclaimer:

Mutual funds are risky and the theme based funds are the riskiest, so do take in professional help. Further all the investments listed out on GoodReturns.in should not be taken as investment advice.

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1. Tech Mahindra:

While making the recommendation, the IT company traded at a price of Rs. 1216 and the target suggested by the brokerage is Rs. 1385. Further the brokerage suggest to place a stop loss of Rs. 1090. From the recommended levels, the upside or the returns for the investor shall be to the tune of 14%. Note

Tech Mahindra is a USD 5.1 billion company offering and capitalizing on advanced technologies such as 5G, Blockchain, Cybersecurity, Artificial Intelligence, and more, to enable end-to-end digital transformation for global customers.

Despite outperformance of the IT sector as a whole, within the IT large cap space, Tech Mahindra has underperformed and the brokerage firm backed by heavy research expects Tech Mahindra to soon catch up pace.

Technical indicators

The scrip has moved out of 6 months healthy consolidation that suggests of an upward move and

acceleration of momentum. We expect the stock to head towards Rs. 1385 as it is an equal to November-December rally (Rs. 780- 1082) as measured from recent breakout level of Rs. 1082. The stock has immediate support around Rs. 1090 as it is 80% retracement of recent up move (Rs. 1048-1237). Among oscillators, MACD is in rising trajectory, thus validating positive bias in the stock, added the brokerage firm.

Positives for Tech Mahindra as cited by the brokerage include:

1)The company holds a leadership position in communication vertical, which will make it a key beneficiary of vendor consolidation in the segment, 2) key beneficiary of opportunities in 5G, 3) in enterprise segment the company will be a beneficiary of digital acceleration, 4) improving deal wins, healthy deal pipeline & healthy traction in large deals and 5) consistent cash flow and healthy dividend payout

“We believe its leadership in communication vertical will make it a key beneficiary of vendor consolidation in the segment. It would also benefit from 5G opportunities. The enterprise segment will also benefit from improved digital traction, success in large deals. Hence, we remain positive on the stock”, added the brokerage.

Financials: For the Q1Fy22 period, the firm’s PAT has improved sequentially by 25% to Rs. 1353 crore. Consolidated revenues have also increased on a QoQ basis to Rs. 10,198 crore. Also for the reported quarter, Tech Mahindra raked in deal wins worth $815 million.

2. Steel Authority of India:

For the Steel major, the ICICI Direct is bullish and sees an upside of 13% i.e Rs. 149 from the recommended price level of Rs. 132. Stop loss suggested for the scrip is Rs. 118.

About SAIL: The Maharatna company is a leading steel producer in India. SAIL is into producing iron and steel at five integrated plants and three special steel plants, located principally in the eastern and central regions of India. Its proximity to its source of raw materials location serves as a major advantage.

Technicals: ICICI Direct is of the view that after a breather of 2.5 months, the stock of SAIL is resolving out of healthy base formation thereby, offering fresh entry opportunity. The stock price took almost 3 months to retrace just 38% of its preceding seven week’s rally (April-May 2021) indicating robust price structure, elevated buying demand. Now the consolidation has established into a triangular continuance pattern.

The stock may in coming months challenge life highs of Rs. 151.Among oscillators RSI has generated cross over above nine period average suggesting further positive momentum, added the brokerage.

Key Triggers for the scrip of SAIL

-Captive supply of iron ore aids in keeping SAIL’s overall raw material costs under check.

– The relatively firm trend in steel prices augurs well for SAIL

– During Q4FY21, SAIL logged perationally steady set of numbers. For Q4FY21, SAIL’s sales volume was at 4.35 million tonne (MT), up 16% YoY. For the quarter, standalone operations reported topline of Rs. 23286 crore which was up 44% YoY & 17% QoQ. Standalone EBITDA for the quarter stood at Rs. 6153 crore up 21% QoQ, while the EBITDA/tonne for the quarter under review stood at Rs. 14145/tonne, as compared to EBITDA/tonne of Rs.12089/tonne in Q3FY21. The ensuing standalone PAT for Q4FY21 stood at Rs. 3444 crore

• Net debt has been lowered by Rs. 16100 crore in FY21.

What should investors do?

ICICI Direct has suggested a buy on the scrip of SAIL for a target price of Rs. 149 and further advised investors to book 50% profits in the stock at 140.80 (Return 7%) and trail stop loss for remaining position to 131.50.

Disclaimer:

Stock market investment is risky. Any investment ideas listed out on GoodReturns.in should not be construed as investment recommendation. Please do seek professional help before any investment decision.

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Advantages of Initial public offering (IPO)

Companies will obtain significant amounts of capital through an initial public offering (IPO) and subsequent investment rounds to fund general corporate operations, growth possibilities, research and development, marketing, and capital expenditures.

An initial public offering (IPO) is when a firm goes public for the first time. This means that formerly unlisted or private firm shares are now available for trade on markets. It’s a frequent means of acquiring funds for small firms or startups who are trying to expand. An IPO allows a corporation to expand its investor base and raise capital.

Investments in initial public offerings (IPOs) are equity investments. As a result, they have the potential to generate significant long-term profits. The money you’ve saved can help you achieve long-term financial objectives like retirement or home ownership. In the IPO order paper, the price per security issued is explicitly stated. As a result, you get access to the same data as larger investors.

You will have an advantage over other traders and investors who will enter when the stock is launched on the market if you enter early. As previously said, certain companies’ initial public offerings (IPOs) fared exceptionally well in the market and provided outstanding first-day returns.

Disadvantages of Initial Public offering (IPO)

The IPO procedure necessitates a significant amount of effort. It has the potential to divert company executives’ attention away from their core business. Profits may suffer as a result. For a better grasp of the complexities of the IPO process, the company should seek advice from investment firms. It’s possible that the company’s owners won’t be able to take many shares for themselves. Investors will perceive a lack of faith in the business if they start selling significant blocks.

The proprietors of the company may potentially lose control of the company. The owners must also be cautious because IPOs make a lot of information about the company’s business and its owners public, which could provide competitors valuable information.

When a corporation decides to go public, there is very little information about it in the public domain. Investing in any company without conducting a thorough investigation might be dangerous. There is a chance that the stock will drop owing to bad performance and poor management. Although IPOs are marketed as a risk-free investment, they are subject to market volatility.

IPOs are regarded as the safest and most advantageous method of investment. However, this is not always the case. IPOs often fail to deliver on their pre-launch promises. IPOs are frequently over-hyped.

Things to check before Investing in an IPO

Check Company’s Background

Because the company is preparing for its Initial Public Offering, there will often be no previous data accessible to check your investment selection. The firm that is floating it, on the other hand, does submit a prospectus. Before making a decision about investing in the organization, you must thoroughly examine and understand all of the information presented in it.

Check the Underwriters

The success of the initial public offering is determined by the big broker who is sponsoring the new issue. You might consider investing in such offerings if the underwriters are well-known.

While applying for it, keep in mind that the corporation is not obligated to repay the cash to public investors.

As a result, you must be informed of the potential risks and rewards when investing.

1. ICICI Prudential Technology Direct Plan:

Launched in January 2013, the fund of ICICI Prudential tech oriented fund manages a corpus of Rs. 3494 crore. Expense ratio is the lowest within the category of over 1%. Note the regular plan of the fund is also having a CRISIL 3-Star rating.

The fund has outperformed the benchmark Nifty with returns of 106% in the last one year.

SIP in the fund can be started for minimum Rs. 500 while for lump sum payment one needs to invest Rs. 5000. There applies a load of 1% in case the redemption is made within 15 days of investment.

Top 10 holdings of the fund are Infosys, HCL, Tech Mahindra, Persistent Systems, TCS, IRCTC, Coforge, Wipro,eClerx and Mindtree.

Notably Rs. 10000 SIP in 3 years time has been worth now Rs. 7.72 lakh i.e. the investment of Rs. 3.6 lakh has more than doubled during the timeframe.

2. ABSL Digital India Direct Plan:

The tech fund of Aditya Birla Mutual fund commanding an asset size of Rs. 1662 crore fund of can be invested in through a SIP starting at Rs. 1000. The direct plan of the fund carries an expense ratio of 1.15%. The scheme works to provide capital appreciation to investors by putting money in technology and tech-linked companies. The fund primarily uses the bottom up approach in the selection of stocks and uses a blend of both value and growth to provide growth in capital to investors.

The direct plan of ABSL Tech fund came into being in the year 2013 and since then has offered a return of over 25%.

Top holdings of the fund are Infosys, TCS, Tech Mahindra, HCL, Cyient, Persistent Systems, Just Dial, Bharti Airtel, First Source and Wipro.

SIP started with an amount of Rs. 10000 3 years hence is now valued at Rs. 7.35 lakh, likewise Rs. 1 lakh worth of investment is now worth Rs. 2.39 lakhs.

3. Tata Digital India Fund- Direct :

This tech fund of Tata Mutual fund came into existence in the year 2015 and since then has offered return of over 25%. The fund works to provide capital appreciation by investing atleast 80% of the corpus in listed IT companies in India.

The benchmark of the fund is Nifty and in a 1-year time frame it has beaten the index and provided return of over 90%.

SIP in the fund can be started for as less as Rs. 150 and the fund entails an exit load if the units are redeemed within 30 days of 0.25%.

In a 3-year time period, the investment of Rs. 3.6 lakh (through a SIP of Rs. 10000 per month is now valued at Rs. 7.21 lakh)

Top holdings of the fund are Infosys, Tech Mahindra, TCS, HCL, Persistent Systems, Wipro, Cyient, Birlasoft, Larsen and Toubro Infotech and InfoEdge.

Return of Best Tech funds

Why technology focused funds?

Technology is the foundation of all such advancements including cloud, analytics and blockchain and with time there shall be only advancement going ahead and through multitude deals and venture into various areas, prospects of these IT companies shall only augment. Further to take on international exposure you can take exposure in international fund of funds (FoFs).

Disclaimer:

Mutual fund investment is subject to risk and the technology sector fund being concentrated to tech funds is even more riskier and hence the investment options listed out here should not be taken for investment advice.