Category: Personal Finance

1. Reliance Infrastructure:

This is an Anil Dhirubai Ambani Group company, the company is primarily engaged in infra development and its core sectors include energy, infrastructure, E&C and defence. The company’s turnover as per the company website is Rs. 18,852 crore.

The company bagged ‘Best Metro of India 2016’ Award for having developed a marvel in Mumbai Metro one.

Stock price journey of Reliance Infra:

The company stock as in 2018 registered an all time high of Rs. 2641 and the last traded stock price of Reliance Infra is Rs. 76.85 per share, while its 52-week high and low are Rs. 109 and Rs. 19.2, respectively. The stock is part of the S&P BSe Small cap stock and is categorized in the ‘T’ category.

What weighed on Reliance Infrastructure stock?

For the last quarter of FY19, the company posted a huge loss of over Rs. 3000 crore and since then the stock has come crashing down. Now even as the group’s companies’ are under NCLT resolution there is a belief that recovery shall be much higher than what is owed to creditors and this is creating fresh interest for the stock.

Financials

As of now, regarding the company’s financials, its debt to equity is well below 1 i.e. a big positive, also the debtors turnover ratio is the highest at 4.6 times.

2. PC Jeweller:

It is the finest jewellery discovery platform offering a widest collection of curated designs to fit every occasion. The company takes pride in its policies that provide easy returns, free shipping, BIS Hallmark, 100% certified jewellery, life-time exchange, best and transparent prices and unique designs all under one roof.

Stock price journey

The jewellery company made its Indian stock market debut in the year 2012 and its price was fixed at Rs. 135 per share. The stock in the year 2018 made an all time high price of Rs. 600 and was last at July 20, 2021 quoted at a price of Rs. 26.40.

There were 2 concerns seen at the company then which led to a drag in its share price first there was a speculation made that the company’s promoters might have hidden information on its business association with Vakrangee. Also, one of the promoter in the company gifted his stake in the company to family members via off market transactions.

Latest financials and other metrics

For the June ended quarter the number of FIIs/FPIs in both number and % terms have increased their holding in the scrip, indicating positive momentum. The firm for the quarter ended March of FY21 posted positive financial results and for the complete financial year 2021, Profit figure came in at Rs. 60.84 crore. Another has been positive growth in PBT less OI of 186%.

3. Yes Bank:

Yes Bank was among the leading private sector bank in the country in existence since the year 2004. The commercial bank is into offering a host of services including investment banking, merchant banking & Brokerage businesses through YES SECURITIES and its Mutual Fund business through YES Asset Management (India) Limited, both wholly owned subsidiaries of the Bank.

What played havoc for Yes Bank scrip?

In mid 2019, Yes Bank scrip saw a lot of downgrades and even Moody’s placed private lender’s foreign currency issuer rating of Ba1 under review for downgrade. And from an all time high reached in Yes Bank’s scrip of Rs. 404 in 2018 again, the stock came tumbling down to Rs. 12.95 per share as of last trade.

Primarily the Moody’s note indicated that the liquidity pressure on the domestic finance firms is expected to impact the credit profile of YES Bank since it has substantial exposure to the weaker firms in the sector.

But later the crisis-ridden lender was rescued by RBI’s action plan and SBI led the bank’s recovery with a number of other banks taking the charge. Even after the recovery plan in place, the bank’s scrip didn’t saw much revival and it is substantially down from its all time high.

Yes Bank’s 52-week high and 52-week low price has been Rs. 20.75 and Rs. 11.1, respectively.

Financials still weak for the lender

– Net profit is -Rs. 3787.75 crore has fallen at 244%.

– NII is the lowest at Rs.968 crore

– Credit deposit ratio is also lowest at 102%

Conclusion:

So, as we have seen these scrips crashing down heavily from their all time highs, investors need to time to time evaluate their portfolio and get out of such stocks and hence this is where portfolio rebalancing comes to play.

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1. Larsen and Toubro Infotech:

The software major L&T Infotech is into offering application development, IMS, digital solution services to BFSI, retail, health, media & hi-tech verticals. The company in its clientele list has 71 Fortune-500 clients with presence in North America & Europe. LTI has grown at 14% CAGR over FY18-21 with robust margins ~19%.

Robust financials for the first quarter of FY22

– Dollar revenues increased 5.1% QoQ to US$470.2 million

– EBITDA margin declined 318 bps QoQ to 18.7%

– Declared a dividend of Rs. 10/share

ICICI Direct Report recommends investors to do this on L&T Infotech scrip

LTI share price has grown by ~6x over the past five years (from ~Rs. 692 in July 2016 to ~Rs. 4288 levels in July 2021).

We remain further positive and retain our BUY rating on the stock

Target Price and Valuation: We value LTI at Rs. 5065 i.e. 35x P/E on FY23E EPS

Digital Prowess, Fortune 500 clients in its kitty a big positive for the company

– LTI’s ability to deliver end-to-end solutions to help in registering industry leading growth.

– Ability to win large deals, presence in niche verticals, effectively mineclients, adding Fortune 500 clients, and digital prowess other key drivers. We expect LTI to• register 18% CAGR in FY21-23E, said the research report.

2. Tata Metaliks

Tata Metaliks (TML) is a subsidiary of Tata Steel, which was established in 1990. TML has manufacturing facilities at Kharagpur, West Bengal.

Net cash position in its balance sheet

India which produces pig iron and ductile iron (DI) pipes.By Q4FY23, TML would double its DI pipe capacity to 4 lakh tonnes. TML has healthy cash flow and strong balance-sheet. It is one of the few players in the steel pipe sector having net cash position in its balance sheet.Q1FY22

Results: TML reported a healthy operational performance in Q1FY22 wherein it reported its best ever quarterly profits.

– Reported revenue of Rs 603 crore, up 187% YoY but down 9% QoQ.

-EBITDA was at of Rs. 154 crore (vs. Rs. 143 crore in Q4FY21, Rs. 10 crore inQ1FY21). EBITDA margin was at 25.5%, up 380 bps QoQ, 2060 bps YoY. Ensuing PAT was at Rs. 95 crore (up 26% QoQ)

What should investors do?

Tata Metaliks share price has grown by ~3.7x over the past five years (from ~Rs. 340 in July 2016 to ~| 1265 levels in July 2021).

– We continue to remain positive and retain our BUY rating on the stock

Target Price and Valuation: We value TML at | 1475 i.e. 7x FY23E EV/EBITDA

Jal Jeevan Expansion, work to expand capacity will boost future price performance

The first phase of DI pipe capacity expansion (of ~1 lakh tonne) is likely to be commissioned in Q4FY22. Second phase is likely to be commissioned in Q4FY23 (of ~1 lakh tonne). Post commissioning of both phases, TML would double its DI capacity from 2 lakh tonnes currently to 4 lakh tonnes

One of the key beneficiaries of Jal Jeevan mission

In the next few years, TML would reap benefits of capacity expansion, which would result in healthy cash flows for the company

Disclaimer:

These 2 stock picks are from ICICI Direct Research report, investors need to do their own analysis and research before betting on any of the stock. Herein the brokerage recommendation should not be construed for investment advice.

Buy Indian Bank for gains up to 62%

Emkay Global Financial Services has set a very bold price target on the stock of Indian Bank and has recommended to buy the stock. The firm has set a price target of Rs 225 on the shares as against the current stock price of Rs 139, which implies an upside of almost 62% from the current price.

According to Emkay Global Financial Services Indian Bank has benefited the most from the merger in terms of liability profile (CASA), and it has largely completed the integration process given its proactive management.

“With strong capital buffers in place and overall NPAs expected to trend down given the transfer to NARCL/resolutions, the bank is gearing up for growth (10-12% yoy). Factoring in better growth/margins and lower LLP/tax incidence, we raise FY22/FY23E EPS by 106%/45%. We expect the bank’s RoE to improve to 12%/13% by FY23/24E from a low of 4% in FY20 post-merger. Accordingly, we are upgrading the stock to Buy from Hold with a revised target price of Rs 225 (0.7x Jun’23E ABV),” Emkay Global Financial Services has said.

Shares of Indian Bank were last trading at Rs 139.80 on the Bombay Stock Exchange.

HDFC Life

Brokerage firm Emkay Global has said to buy the stock of HDFC Life with a price target of Rs 870 on the stock. Considering the current market price of Rs 672, it is an uptick of more than 25%. The firms sees several positives for the company and has hence suggested buying into the shares.

According to the broking firm, HDFC Life’s market share has expanded by 230 basis points qoq to 17.8% from 15.5%. The brokerage has also noted that the solvency ratio was healthy at 204%, providing comfort over any near future dilution for the company.

According to Emkay Global growth improvement continued in credit protect and annuity businesses amid increased focus on specific lending products.

“We expect the trend in margins to remain stable with a balanced product mix and a gradual rise in the share of protection and annuity plans along with increasing penetration in deeper geographies. We roll forward our target price to Sep’22E and maintain Buy (OW in EAP) with a revised target price of Rs 870 (Rs 848 previously), corresponding to 4.5x P/Sep’23E EV,” Emkay has said.

Shares of HDFC Life were last seen trading at Rs 671 on the National Stock Exchange.

Investors should tread with caution

Investors should tread with caution when investing, as we believe that markets are not at cheap levels. Price to earnings multiples are way ahead of long term averages and hence investors should only invest small amounts. Ideal way, is to either stay invested or invest in small amounts.

Disclaimer

The above two stocks are picked from the brokerage report of Emkay Global. Neither the author, nor Greynium Information nor the brokerage would be responsible for any losses incurred based on a decision after reading the article. We at goodreturns.in have been constantly emphasizing the need to reduce over exuberance in stocks and invest with caution. So, please do be careful.

NIFTY FMCG Sector

The NIFTY FMCG Index will be tracked by the ICICI Prudential FMCG ETF. The Nifty FMCG Index is made up of 15 FMCG stocks that are listed on the National Stock Exchange (NSE). FMCG Market is the 4th Largest Market in India.

The sector is divided into three main segments: food and drinks, which account for 19% of the total, healthcare, which accounts for 31%, and household and personal care, which accounts for the remaining 50%.

Hindustan Unilever, which has the greatest weighting in the index, is followed by ITC and Nestle India as firms that make up this index. As a result, investing in this ETF will provide you with exposure to major companies in India’s fourth-largest sector. During the NFO, a minimum investment of Rs 1,000 in multiples of Re 1 is required.

Almost all FMCG brands have now connected with major e-commerce platforms, allowing their items to be delivered directly to consumers’ homes.

Details To Know Before Opting

New Fund Offer Closes on: August 02, 2021

of business hours upto August 02, 2021

Ongoing/Continuous Offer)

multiples thereof.

Should You Consider?

Invest in ICICI Prudential FMCG ETF aims to benefit from:

• Increasing awareness, spending power, ease of access, and changing lifestyles.
• The increased competition encourages businesses to innovate and introduce new products.
• Increased consumption in rural and urban areas might be a growth factor.
• Low capital required: You can invest as little as Rs.500 in 15 FMCG firms.

Should You Consider?

FMCG sector funds are a form of mutual fund that invests in consumer goods companies. Fast Moving Customer Goods (FMCG) is an abbreviation for a wide range of products that customers use on a regular basis.

The index has only returned 20% in the last year, which is lukewarm when compared to the general market, which has produced tremendous returns. When the dividend portion of this return is factored in, the total return from the index is 23.11 percent. This fund is appropriate for individuals interested in gaining exposure to the FMCG industry.

Disclaimer

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates.

You can’t always get the perfect SIP?

Having said that, you can never get the perfect mutual fund over a long period as market dynamics change quickly. For example, a top performing fund today may no longer be a top performing fund, a couple of years from now. Let’s say that a fund reaped the benefits of heavily investing into banking stocks a year back, but, 2 years from now economic growth takes a hard landing. The fund will start underpeforming as banking stocks start falling. Similarly, if a fund has heavily invested in IT on hopes of a sharp turnaround in US economic activity, should the economic activity falter, we could see IT stocks take a knock. The fund performance really depends on which way the top 10 stocks of the portfolio are skewed. In any case, we give you two investment ideas, to invest through SIPs.

Axis Bluechip Fund

We are suggesting Axis Bluechip Fund, because this fund has been rated 5-star by Crisil, Morningstar and Value Research. We have seen this rating being there for some years now, which makes it a relatively consistent performer over the years.

We have been emphasizing for some time now, that investors should only invest through the SIP route. It makes no sense to invest large amounts, when the Sensex is at 53,000 points. In any case, Axis Bluechip Fund has given a returns of 40% in 1-year, while the 3 and 5 year returns are pegged at 14% and 16% respectively. An SIP in Axis Bluechip Fund can commence with a sum of Rs 500 every month, while the initial amount for beginning and investment is Rs 1,000. Axis Bluechip Fund is a largecap fund and when the markets at a record, no investment expert would want to recommend a small cap fund. With assets under management of Rs 28,333 crores, Axis Bluechip Fund is not a small fund in terms of assets under management.

Edelweiss Large & Mid Cap Fund

This fund has been another decent performer over the years, with a 5-star rating from CRISIL. Unlike Axis Bluechip Fund, the assets under management are not large, with a smaller size of just Rs 833 crores. Smaller size funds maybe more nimble that way, in the sense when you want to quickly churn your portfolio it becomes easy for the fund manager.

This fund was launched way back in 2007 and since then has given a returns of almost 12% on an annualized basis since its launch.

Edelweiss Large & Mid Cap Fund has exposure to stocks like Infosys, ICICI Bank, HDFC Bank, State Bank of India and Reliance Industries. This is the trend in most of the funds, where the above stocks have to almost always be there.

An SIP in the fund can commence with a sum of Rs 500 every month. Please be informed that a 5-star rating does not guarantee returns and we are just highlighting what some of the agencies have given. However, it has been noticed over the years, that long term investors have reaped good gains from investing over a long period of time, including by way of SIP investment.

Disclaimer

Mutual Fund investments are risky and investors are advised to invest only if they are able to take losses. Neither the author, nor Greynium Information Technologies would be responsible for any losses incurred based on the above article.