Category: Personal Finance

Coal India

This is one stock that is worth considering for investment SIPs. One of the biggest reasons is the dividend yield that an investor gets on the stock. The downside risks are very low because of the dividend yield. Last year the company declared a dividend of Rs 12.5 share, which on a current market price of Rs 146, yields a dividend of 8.16%. This means your dividend yield is much better than the bank deposit interest rates.

According to Edelweiss, Coal India’s biggest achievement in Q1FY22 has been to rationalise production and reduce pit-head inventory to 60mt–lowest level in past six months.

“Lower inventory results in less grade slippage issues, thus improving FSA realisation. The brokerage is positive on the company’s improving cash generation prospects that would help it maintain dividend yield of 12-15% in FY22 despite an uptick in capex. It maintains ‘BUY/SO’ with target price of Rs 185 on 9x Q2FY23E EPS,” the brokerage has said.

The risks here are limited as you keep getting a solid dividend payout.

Reliance Industries is a stock which you can consider for SIPs

If you are confident of the growth story of a company you can invest small amounts, just as you do and buy stock of Reliance Industries every month. Most brokerages are bullish on the stock of the company as the growth story for the next five years is in tact.

Recently, brokerage firm Motilal Oswal placed a buy call on the stock. The company factored in valuations of all the businesses of the company and arrived at a fair price of Rs 2,345 for the stock.

“Using SOTP, we value the oil to chemicals business at FY23E EV/EBITDA of 7.5x, arriving at a valuation of Rs 764 per share for the standalone business, and add Rs 68 for the E&P assets. We ascribe an equity valuation of a) Rs 847/share to RJio on FY23E 20x EV/EBITDA and b) Rs 755/share to Reliance Retail on FY23E 35x EV/EBITDA, factoring in the recent stake sale. Reiterate Buy, with target price of Rs 2,430 per share,” Motilal Oswal Institutional Equities has said.

You can buy systematically buy every month and if you feel the price has risen, you can stop and look at other stocks that brokerages are highlighting.

Why invest in stock SIPs?

The one good thing about SIP in stocks is that should the price fall, you can buy again every month thus averaging the cost. This means just like mutual funds the risk of market fluctuations is hedged because the law of averages applies. In the above two stocks, one is a growth story and the other a dividend story, where your SIP can fetch good returns. We all know that if folks had to start an SIP in some banking stocks or IT stocks that would have had a solid portfolio. Nonetheless, it’s never too later to start.

Disclaimer

Stock market investment is subject to risk associated with the stock markets and hence investors need to be very careful. Neither the author, nor the brokerage, nor Greynium Information Technologies Pvt Ltd would be responsible for losses incurred based on a decision to buy into the stocks based on the above article. Stock indices are currently at lifetime highs and hence investors needs to be cautious.

1. Nippon India Nivesh Lakshya Fund:

This long duration fund can be invested by millenials who have their financial goals long ahead say for instance retirement planning. Indeed the investors in these funds need not be impacted by interest rate movement.

Fund’s investments

The fund’s investments are into government papers hence no risk element. Typically the bonds come with a maturity of 23-25 years and all of the gains are reinvested into similar investments. Primarily the portfolio includes government bonds maturing in 2042, 2044, 2045 and 2046.

This fund commands a substantial AUM of Rs. 1789 crore and further has a lower expense ratio of 0.52%. The fund carries a moderate risk as per the risk is moderate. SIP route in the fund is suggested as there are interest rate risk going ahead so staggered investment in the fund shall be best. The fund is also suitable for those investors who do not want credit risk with their funds.

This can be a good investment option in comparison to RBI floating rate bonds that yield a post tax return of 5.5%. Notably SIP in the above plan or debt scheme can be started for as less as Rs. 100.

2. Mirae Asset Emerging BlueChip Fund-Growth:

This mutual fund from the house of Mirae AMC is a large and mid cap fund with an AUM of Rs. 18,675 crore. The fund is CRISIL 5-Star rated and is categorized to be very high on risk as per the risk-o-meter. Expense ratio of the fund is at 1.66% that is indeed lower than the category average.

Prime investments

With prime investments into large and mid cap stocks the fund aims to provide capital appreciation. Over the long tenure of say 10 years, the SIP annualized return have been at a good over 24%. The top holdings of the fund include ICICI Bank, HDFC Bank, Infosys, Axis Bank, SBI, Bharti Airtel, TCS etc.

Through participation in the India growth story over the long run, individual investors will be able to make significant gains over the long run. Primarily emerging companies that have the potential to turn into bluechip names works well.

The investment approach is bottoms up approach: driven by value investing, in growth oriented businesses.

Other key points integral to the fund

Benchmark of the fund is Nifty Large Midcap 250 (TRI)

Fund managers are Mr. Surana and Mr. Ankit Jain

Direct plan of the scheme entails an expense ratio of just 0.68%

So by taking on to this investment bet for a longer term, the fund may be able to generate alpha over sufficient longer tenure through exposure to mid caps. Also, the large cap portfolio provides stability to the holdings with no major fluctuations. Here the SIP invested can be kick-started for Rs.1000.

Disclaimer:

The story listed here is only for informational purpose. Mutual fund investment is risky and one needs to engage in his or her own research and look for professional advice before betting on any of the investment product.

GoodReturns.in

5 Stocks That Have Given Multibagger Returns Of Over 500-1000% In The Past Year

Tanla Solutions

Tanla Platforms Limited, formerly Tanla Solutions Ltd, is an Indian cloud communications firm situated in Hyderabad. In the cloud communications area, the company offers value-added services. Tanla has offices in eleven cities throughout the world, including Singapore, London, Colombo, and Dubai. The company is listed on the BSE and NSE in India.

Over a three-year period, the stock gave a fantastic return of 2150.91 percent, compared to 96.3 percent for the Nifty IT index. The company has grown its income by 28.59 percent, in the past three years. Tanla Platforms’ PE ratio is 81.08, which is expensive and pricey in comparison. The current ratio of Tanla Platforms is 2.29. Tanla Platforms’ current year dividend is Rs 0 with a yield of 0.21 percent.

Adani Enterprise

According to Adani Group Chairman Gautam Adani, the Adani Group has taken over management control of the Mumbai International Airport from the GVK Group.

Adani Enterprises Ltd. was founded in 1993 and its share price presently is 1401.45. Its current market capitalization stands at Rs 154132.88 Cr. In the latest quarter, the company has reported Gross Sales of Rs. 133587.3 Cr and Total Income of Rs.137506.5 Cr.

For the past three years, the company has shown a good profit growth of 23.24 percent. The corporation manages its cash flow well, with a CFO/PAT ratio of 2.48. The company has a high EV/EBITDA ratio of 112.18. The stock gained 976.87 percent over three years, compared to 41.72 percent for the Nifty 100. In the past year, the stock performed well and gave a return of 808%.

CG Power and Industrial

CG Power and Industrial Solutions founded in 1937, is a Small Cap business in the Electric/Electronics sector with a market cap of Rs 10,101.89 crore. Stock generated 34.7 percent over three years, compared to 50.6 percent for the Nifty Midcap 100. The promoters’ share of the company has increased by 53.24 percent in the last six months. The company’s financials aren’t stellar, yet the stock has returned a whopping 772 percent in the last year. Over the last three years, the company has had a dismal ROCE of -19.60 percent. With a coverage ratio of -5.78, the company has a low interest coverage ratio.

Intellect Design

Intellect Design Arena develops financial technology that assists banks in leading enterprises to success and growth. Intellect Design’s PE ratio is 45.87, which is high and overvalued in comparison. Only 4.49 percent of trading sessions in the last six years had intraday drops of more than 5%. The stock made 263.11% during the last three years, compared to 50.6 percent for the Nifty Midcap 100.

Adani Total Gas

Only 7.96 percent of trading sessions in the last two years had more than 5% intraday gains. Adani Total Gas Ltd., founded in 2005, is a Large Cap business in the Gas & Petroleum industry with a market cap of Rs 96,920.76 crore.

In the last five years, the company has maintained effective average operating margins of 28.63 percent. The ROA of Adani Total Gas is 16.54 percent, which is a positive sign for future performance; however, greater levels are usually preferable. Adani Total Gas offers a greater return on investment (ROI) of 27.50 percent.

Disclaimer

Stock market investment is subject to risk associated with the stock markets and hence investors need to be very careful. Neither the author, the brokerage, nor Greynium Information Technologies Pvt Ltd would be responsible for losses incurred based on buying into the stocks based on the above article.