Category: Personal Finance

Mahindra CIE

Motilal Oswal is also betting on the stock of Mahindra CIE and believes it has had a strong all round performance, led by management initiatives. The company is a multi-technology automotive components supplier. It is a subsidiary of the CIE Automotive group of Spain; an industrial group specialised in supplying components and subassemblies for the automotive market, which has presence across the globe and is listed on the stock exchanges in Madrid and Bilbao.

The management recently highlighted it is optimistic about a recovery in India and Europe during 2HCY21, with the semiconductor shortage expected to ease from Sep’21. It has approved a new wholly-owned subsidiary – CIE Hosur – to set up a greenfield plant at Hosur to support its Bill Forge unit and lower corporate tax.

“Mahindra CIE growth story is on track, driven by its organic initiatives (new products/customers). This, coupled with cost-cutting initiatives in both India and the EU, would drive margin expansion. The stock trades at valuations of 15.5x/13.7x CY21E/CY22E consolidated EPS. We maintain our Buy rating with a target price of Rs 295 per share (15x Sep’23E consolidated EPS),” the brokerage has said.

Shares of Mahindra CIE last closed at Rs 244 on the NSE.

HUL: Buy with a 19% upside

Motilal Oswal sees an upside of 19% on the stock of FMCG major Hindustan Unilever. The brokerage says that rural demand has remained resilient, despite a higher incidence of COVID19 cases v/s last year.

“With mobility improving, demand for FMCG products will improve, especially for those which are discretionary in nature, leading to higher operating margin going forward. Rural demand has remained resilient, despite a higher incidence of COVID19 cases v/s last year.

The expectation of a good monsoon also augurs well for demand going forward, with no material downtrading being witnessed. We maintain our buy rating on the stock of Hindustan Unilever, with a price target of Rs 2,840 per share,” the brokerage has said. The shares of HUL were last trading at Rs 2,359 on the NSE.

Buy Ultratech Cement shares for gains of 18%

Motilal Oswal has suggested to buy the shares of Ultratech Cement with a higher price target of 18% from the current market price. According to the broking firm, better realization and lower cost inflation have driven 9% beat on EBITDA margins this quarter.

“For key infrastructure projects, Ultratech Cement is well-suited to tap into expected growth in both retail and institutional (non-trade) cement demand in India. While it is ramping up its underutilized acquired capacities, it also has a strong pipeline of expansion projects that offers strong growth visibility

Market share gains should continue, aided by the ongoing 20mtpa expansion program, which should drive a 13% volume CAGR over FY21/24E. We raise our EPS for FY22E/FY23E by 6%/6%, factoring in a better realization outlook. We estimate a 26% EPS CAGR over FY21-23E,” the broking firm has said.

Disclaimer

Investing in stocks is risky and investors need to be cautious. Neither Greynium Information Technologies Pvt Ltd nor the author, nor the brokerage would be responsible for any losses incurred based on decisions made from the article. Investors are also advised caution as the markets are now at a record high. Please consult a professional advisor and avoid investing lumpsum amounts.

CEAT

Broking firm, Motilal Oswal has a “buy” rating on the stock of tyre major, CEAT. The firm believes that cyclical recovery in both OEMs and replacements would enable the faster absorption of new capacities and drive the benefit of operating leverage.

“Coupled with the gradual pass-through of cost inflation, this would support margins over the medium term. Valuations at 11.3x FY23E consolidated EPS do not capture the ramp-up in new capacities in an improving demand environment, which would lead to margin recovery. Maintain Buy, with target price of Rs 1,775 (13x Sep’23 consol EPS),” the broking firm has said.

Shares of CEAT were last trading at Rs 1,372 on the NSE.

Bajaj Auto

Emkay Global has a buy call on the stock of Bajaj Auto. The firm expects strong momentum in exports to continue, while domestic volumes should recover swiftly ahead. The focus on EVs has increased with the incorporation of a separate subsidiary for manufacturing 2Ws, 3Ws and 4Ws. “We expect a strong volume upturn with a 12% CAGR over FY21-24E, led by growth of 12% in 2Ws and 20% in 3Ws. We trim FY22-24 EPS estimates by 4-5%, mainly on lower margin assumptions,” the brokerage has said.

Emkay global has reaffirmed a Buy with SOTP-based target price of Rs 4,420 (Rs 4,340 earlier), based on 18x P/E on Sep’23E (earlier Mar’23E). The target multiple implies a core P/E of 18x and cash/share of Rs722. “KTM is valued at Rs140 per share based on a 12x P/E and a 20% holding company discount. Key downside risks are lower-than-expected demand in key geographies, increase in competitive intensity and adverse currency/commodity prices,” the firm has said.

Bajaj Auto shares were last trading at Rs 3,846.

Mphasis

Broking firm, Motilal Oswal has a buy call on the stock of IT company Mphasis. The stellar growth in the Direct channel (+9.8% QoQ CC; +32.5% YoY CC) was encouraging, the broking firm has said.

“However, the strong momentum was partially offset by an 18.1% QoQ/48.7% YoY decline in the DXC business,” Motilal Oswal has said. We would revisit our estimates post the earnings call. We await further clarity on the near-term outlook, DXC channel, and margin. We maintain our Buy rating,” the broking firm has said.

Polycab

Brokerage firm, Emkay Global has a buy call on the stock of Polycab and has recommended buying the stock for a Rs 2060 upside target from current levels. “We remain constructive on Polycab, considering its consistent focus on strengthening balance sheet, as well as potential for margin improvement with the full benefits from ‘Project Udaan’ kicking in,” the brokerage has said.

“Weak Q1 print leads us to cut FY22E earnings by 7%, but we maintain FY23 and FY24 estimates. Revenue growth and margin recovery will be the key monitorables, going forward. Maintain Buy on the stock of Polycab, with a target price of Rs 2,060,” Emkay Global Financials has said.

Disclaimer

Investing in stocks is risky and investors need to be cautious. Neither Greynium Information Technologies Pvt Ltd nor the author, nor the brokerages would be responsible for any losses incurred based on decisions made from the article.

1. Syngene Internatioal:

ICICI Direct has suggested to buy Syngene for a price target of Rs. 780, implying an 25% upside from the last traded price of Rs. 628.15. The price at the time of recommendation of the innovation-led contract research, development and manufacturing organization was Rs. 627.7.

Company profile: The company offer integrated scientific services from early discovery to commercial supply. It is one of the largest listed contract research organisations (CRO) in India

Financials: Revenue breakup: Discovery services (35%), dedicated services (32%),development and manufacturing (33%)

Q1FY22 Results: Syngene reported mixed Q1FY22 results. Revenues grew 41% YoY to Rs. 658.5 crore amid lower base, normalisation of all verticals and manufacturing of Remdesivir. EBITDA margins contracted 178 bps YoY to 27.8%, owing to change in product mix. Consequent PAT was at Rs. 77.3 crore (up 33.3% YoY)

Here’s advice on the Syngene International for investors

ICICI Direct report says Syngene’s share price has grown by ~2.9x over the past five years (from Rs.| 201 in June 2016 to Rs. 583 levels in June 2021). Due to the structural story of outsourcing, we remain positive and retain our BUY rating

Target Price and Valuation: We value Syngene at Rs. 780 i.e. 50x P/E on FY23E EPS.

Tailwinds for the company

-Guidance of double digit revenues growth for FY22

– Elite clientele including the likes of Amgen, Zoetis, Herbalife, GSK, etc, and• multiple year extension of BMS, Baxter contracts, the company remains well poised to capture opportunities in the global CRO space

– Eight of the top 10 global pharma companies have been availing services

for the last five years The client base has grown from 256 to more than 400 over FY16-21

2. Hindustan Unilever:

After the earning results of HUL have been out for the Q1Fy 22 period, ICICI Direct has placed the buy call on the stock for a price target of Rs. 2750, from the last ended price of Rs. 2358, implying an upside of 16.62%.

The company is the leading fast moving consumer goods company of the country with as many as 40 brands across segments in its kitty. The company is the market leader in fabric wash, personal wash, cosmetics, shampoos and many other categories. The company has a distribution reach of ~8.0 million (mn) outlets with a direct network of more than 3.5 mn.

Acquisition of GSK Consumer

HUL acquired GSK Consumer Healthcare’s business in 2019 and integrated•Horlicks and Boost brands with the foods & refreshment segment

Q1FY22 Results: HUL reported dismal Q1FY22 results. Sales were up 12.8% YoY with muted 9% volumes growth on a low base. EBITDA was at Rs. 2847 crore, up 7.7% YoY, with margins at 23.9%. Consequent PAT was at Rs. 2061 crore (up 9.6% YoY).

ICICI Direct take on HUL Scrip

HUL’s share price has gone up by ~1.5x over the past five years (from Rs. 922 in July 2016 to Rs.| 2388 levels in July 2021). We roll over FY24 numbers givenCovid-19 related disruptions have temporarily impacted financials & FY23-FY4 would be a normalised year. We continue to remain positive and retain our BUY rating on the stock.

Target Price and Valuation: We value HUL at Rs. 2750 i.e. 55x P/E on FY24E, said the brokerage firm in its report.

Integration of Nutrition business, Visible prospects in Fabric wash-Good Triggers

– Synergistic benefits of integration of nutrition business (Horlicks & Boost) to drive margin expansion.

– Strong visible premiumisation trend, specifically in fabric wash

– Direct distribution reach to get further enhanced, going forward

– Strengthen manufacturing capacity (1.3x of pre-Covid) to tap demand recovery

– Digital initiatives are capturing more than 10% of the business

Disclaimer:

Stock market investment is risky and it is iterated time and again that to reap significant gains you need to remain invested in them and also be prepared for the losses if any. So be mindful the stocks listed here are taken from brokerage report and need not be construed as investment advice.

GoodReturns.in

Axis Small Cap Fund

This fund is not for investors unwilling to take the risk. Small cap funds are highly volatile in terms of returns and hence investors should be careful. Axis Small Cap Fund has generated a returns of 91% in the last 1-year, which is phenomenal. The 3-year returns is 29% on an annualized basis, which again is amongst the best in its class.

The fund has exposure to small cap stocks like Galaxy Surfactants, Tata Elxi, JK Lakshmi Cement, CCL Products etc. This fund has also been rated as 5-star by Morningstar, another top rating agency.

You can commence an SIP in the stock with a sum of Rs 500 only. Investors looking for long-term returns invest. A sum of Rs 10,000 invested in SIPs in he last three years would be worth Rs 6.5 lakhs today. This means, if you had to invest every month Rs 10,000 for 36 months the sum invested would be Rs 3.6 lakhs, but, your portfolio value would be a solid Rs 6.5 lakhs.

ICICI Prudential Short Term Fund

We have chosen this fund for those looking to invest in debt funds by way of SIPs. ICICI Prudential Short Term Fund is a debt fund that generates income through investments in a range of debt and money market instruments. For those looking at steady returns and protection of capital, this is a good fund to be in. ICICI Prudential Short Term Fund has been rated as 5-star by Value Research.

As is the nature of the scheme, most of the money is parked in government owned securities, which are likely to provide safety, but, low returns. Investors can start an SIP by investing a sum of Rs 1,000 every month. This is a rather large fund with assets under management of nearly Rs 21,000 crores.

Canara Robeco Emerging Equities Fund

Again, this is a SIP to invest, where the ratings are 5-star from Value Research. The fund invests in a combination of large- and medium-sized companies, which gives flexibility to the fund manager to move from larger companies to slightly smaller or vice versa.

The assets under management of the fund is Rs 9,633 crores and investors can look to invest small sums of Rs 1,000 every month. While Canara Robeco Emerging Equities Fund is a kind of flexi cap fund, most of the investments are tilted towards the large cap stocks with holdings in stocks like HDFC Bank, Infosys, ICICI Bank, Axis Bank and Bajaj Finance.

At the moment, with the markets at record highs, the best way to invest would be the SIP route. it’s difficult to predict movement of markets in the longer term and hence this is the best route to take. If you are unable to analyse the funds it is better go for SIPs of well rated funds.

Disclaimer

Investing in Mutual funds, particularly equity mutual funds are subject to stock market risk. Please do your own analysis and research. Neither the author, nor Greynium Information Technologies would be responsible for losses incurred based on this article.

Buy Coal India stock for dividend yields of more than 8%

This stock has been giving solid dividends for many years now. In the FY 2020-21 the board declared a dividend of Rs 12.5 per share in total, including interim dividend. If you buy the shares at the current market price of around Rs 144, the yield is around 8.6%, which is superb. We believe at least for the next few years, the dividend would continue to remain strong as the fiscal deficit looms on the government and it pushes public sector units to declare higher dividends.

We foresee good demand for Coal in the country, and the company is also cash rich and debt free. Having said that do not expect the stock to perform dramatically well from these levels, though some brokerages have set a higher price target of Rs 180 on the stock. If that happens investors would get capital appreciation we well. However, we do not want to predict stock movement at the moment, though we believe that risks are on the lower side are limited on account of the dividend yield on the stock.

Rural Electrification Corporation

The company is a majority government owned company, that is into infrastructure funding. For three consecutive years, 2018-19, 2019-20 and 2020-21, REC has declared a dividend of 11 per share. If you take into account the current market price of Rs 153, the stock is available at a dividend yield of 7.13%.

Again, it is important to predict the dividend yield on the stock, so investors do not buy the stock and get stuck with lower dividends. We believe there is no reason for the Rural Electrification Corporation not to maintain or enhance the dividends in the years to come.

In fact, for FY 2020-21, Rural Electrification Corporation recorded its highest ever yearly net profit at Rs 8,362 crores. Sanctions stood at Rs 1,54,821 crore as against Rs 1,10,908 crore, up 40% and the net profits were up a staggering 71%.

Apart from the dividend factor, REC is also good a stock to buy from a fundamental point of view. Shares in REC were last trading at Rs 152.80 on the NSE.

Power Finance Corporation

Power Finance Corporation, is another stock that is relatively safe and the downside risks are low. Again, like the two stocks mentioned above, this too is a government of Indian owned entity.

In FY 2019-20, the company declared a dividend of Rs 9.5 per share, while in 2020-21 it declared a dividend of Rs 8 per share. This takes the dividend yield on a share price of Rs 128, to the 6.5% levels. Being a company that is engaged in infrastructure lending, the downside risks are limited. PFC continues to maintain a healthy loan book, as well as low levels of non performing assets and has the highest net worth among NBFCs in India.

While for dividend yields the stock is a good bet, fundamentally too things look cheap. The stock is available at a price to book value of just 0.42 times, which makes it a good buy.

Disclaimer

Investing in stocks is risky and investors need to be cautious. Neither Greynium Information Technologies Pvt Ltd nor the author, would be responsible for any losses incurred based on decisions made from the article. Investors are also advised caution as the markets are now at a record high. Please consult a professional advisor and avoid investing lumpsum amounts.