Category: Personal Finance

PNC Infratech

PNC Infratech Ltd., founded in 1999, is a Mid Cap business in the Infrastructure sector with a market capitalization of Rs 6,298.04 crore.

PNC Infratech’s (PNC) performance was outstanding, with a better topline and margins than planned, thanks to operating leverage. The topline increased by 42 percent year over year to Rs 1644 crore, owing to an enhanced executable order book and optimal labour availability. Operating leverage drove the resultant margin to 14.1 percent. Despite higher taxation, PAT increased by 70% year over year to Rs 129.4 crore. This was due to improved operating performance, lower interest costs, and lower interest costs.

With a Stop target price of Rs 300/share, ICICI Securities’ BUY rating is unchanged. The company’s construction business is worth Rs 253/share (6.5x FY23E EV/EBITDA or 12x FY23 EPS), according to the brokerage.

Nirlon

Nirlon‘s results in FY21 was subdued. In FY21, revenues increased by 2.2 percent year on year to | 316.9 crore. It was Rs 77.1 crore in Q4FY21, down 6% year on year. Occupancy was down QoQ at 95.2 percent, compared to 97.5 percent in Q3, as one significant licensee moved out after their licence expired. EBITDA for FY21 increased by 2.7 percent year on year to | 237.2 crore. PAT increased 16.4% YoY to Rs127.4 crore in FY21, boosted by cheaper interest due to capitalization.

ICICI Securities advises buying at Rs.309 with a target price of Rs.400.

The stock maintains a BUY rating, with a NAV-based target price of Rs 400/share. We use a 9 percent cap rate and a 15% discount rate in our valuations to be careful. We believe the stock has a lot of value because the expected expansion isn’t accounted for in the CMP, as per the brokerage.

Bata India

In Q4FY21, Bata India’s revenue recovery rate (adjusted) was 80 percent, up from 74 percent in Q3FY21. Lower revenues from formal and fashion footwear continued to have an impact on gross margins year over year, however, gross margins improved QoQ. In Q4FY21, revenue declined 5% year on year to | 589.9 crore.

Bata changed their product line from formals and fashion to casuals, fitness, and essentials to match the present market condition.

“We believe Bata’s strong brand loyalty and pan-India retail reach will allow for faster revenue recovery and improved profitability.

Over FY20-23E, we forecast a 100 basis point increase in margin to 28.2 percent and a 450 basis point increase in RoCE to 32.7 percent. With a revised target price of | 1925 (48x FY23E EPS, previously TP: | 1680), we upgrade the stock from HOLD to BUY,” the brokerage said.

3 Stocks With Strong Support For Short Term Investors To Park funds

Disclaimer

Views mentioned herein are taken from the brokerage report of ICICI Securities. Neither the author, nor the brokerage nor Greynium Information Technologies would be responsible for losses incurred based on the article. Please consult a professional advisor. Investing in stock markets is risky.

Why should you invest in Pharma ETFs?

For those who may not be well versed in stock picking, mutual funds are the best route and likewise they can go for ETFs. Most of the ETFs though are passively managed and track the underlying index so herein they will tend to replicate returns of the healthcare index. Further because of the passive nature of the fund management these funds carry lower expense ratio.

Other advantages of ETFs in general

1. As the name suggests these funds are primarily traded on exchanges and so during the market hours, investors can conveniently sell or buy their units.

2. They also provide the benefit of you getting the units in real time. This is against the mutual funds which allot the unit based on the closing NAV or net asset value.

3. Another positive is that the allocation is in line with the index there is no likelihood of the fund manager going wrong in the selection.

So, investors can have the best exposure to listed pharma scrips on Indian exchanges via the ETF route:

Here are some such Pharma ETFs where investors can test their fate and make good returns in line with the Nifty healthcare index.

1. ICICI Prudential Pharma ETF:

Like with ETF, these ETFs shall serve an investor with the highest return if held for a long term of say over 7 years. NAV of the fund as on June 25, 2021 is 85.93. The fund aims to provide before expenses that closely correspond to the total return of the benchmark index subject to tracking errors.

Minimum lump sum investment in the fund can be to the tune of Rs. 1000. As on May 31, 2021, the fund’s size is to the tune of Rs. 20 crore. Benchmark of the fund is Nifty Healthcare TRI.

Notably this is the most recently launched ETF so return and all other such data is not available. Top holdings of the fund include Sun Pharma, Dr. Reddy’s, Divi’s, Cipla, Apollo Hospitals, Lupin, Aurobindo Pharma etc.

Mr. Kayzad Eghlim is the fund manager of the scheme.

2. Axis Healthcare ETF:

Minimum investment in the fund is Rs. 5000 and the AUM of the fund is Rs. 28 crore as on May 31, 2021. This ETF is also lately launched and tracks the benchmark as Nifty Healthcare TRI. Expense ratio of the fund is 0.22 percent. Since the launch date i.e. May 17, 2021, the fund has yielded over 2% return.

Some of the top holdings of the fund have been Sun Pharma, Divis Labs, Dr. Reddy’s, Cipla, Apollo Hospitals, Lupin, Aurobindo Pharma, Laurus Labs, Biocon.

Mr. Jinesh Gopani is the fund manager of the Axis pharma ETF. As on June 28, 2021, the ETF trades at an NAV of 86.55, with day’s range between 85.25-86.95. Volume in the ETF is 5000.

3. Nippon India Nifty Pharma ETF:

This Nippon India Nifty Pharma ETF is currently available as a NFO. Minimum application for the NFO is Rs. 1000 and thereafter. The portfolio of the fund shall comprise stocks that constitute the Nifty Pharma Index and in exactly the same proportion as the underlying Index.

Nonetheless, investors should be mindful of the various risks such as risk per se liquidity, settlement, default risks etc.

Notably, even some of these are new ETF launches, it important to note that their benchmark has done exceedingly well over the last year and 1-year return from the Nifty healthcare has been to the tune of 48 percent and the Covid outbreak has only enhanced the prospects for the sector.

Taxation of Pharma ETFs

If the mutual funds are sold after holding for a period of 1 year and gains are over Rs. 1 lakh then they will be taxed at the rate of 10%. Note capital gains of up to Rs. 1 lakh shall be exempt from tax.

Nonetheless if the holding period is less than 1 year then capital gains shall be taxed at the rate of 15%.

Taxation of dividend if realized on Pharma ETFs:

Dividends are added to the individual’s income and taxed as per the investors’ respective tax slab. Note, if an investor’s dividend income exceeds Rs. 5,000 in a fiscal year, then the AMC shall also deduct a TDS of 10% before the distribution of dividend.

Conclusion:

Notably even as these schemes are lately launched they provide investors the opportunity to have an exposure to an overwhelming pharma pack that has the potential to general multibagger returns in few years time.

Disclaimer: Note these ETFs are listed for informational purpose. Authors, company will not be liable for any losses incurred based on the decision taken considering the above story. Investors should do their research and consult professional investment consultants.

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