Category: Personal Finance

The brokerage’s take on Ipca Laboratories

According to the brokerage’s research report “Ipca has grown at almost 1.5x industry growth over the last five years. Its success is attributable to its R&D, where it has successfully demonstrated aceclofenac (Zerodol) superiority to other NSAIDs and low0dose chlorthalidone (CTD) efficacy that has enabled it to shift Rx to its own brands. Ipca is confident of not only sustaining its pain franchise- Zerodol peak sales >INR10bn – but also grow cardiac and other divisions. The company is getting aggressive to expand cardiac therapy to an aspirational 25% of revenue (from ~17-18%) and plans to add 350-400 salesforce.”

Edelweiss Securities Ltd in its research report has also said that “The UK business is ~60% down from its peak, but Ipca is confident of recovering a large part in the next 18 months as it will have a basket of ~25 products (up from 9) the next 18 months on its own label. The EU situation, which is currently facing excess inventory, should start easing over the next couple of quarters. Ipca’s acquisitions are either to fill gaps in existing businesses (Lyka for injectable) or part of long-term plans (Pisgah: low-volume/high-value CRAMS). Investments in subsidiaries/associates have been less than USD100mn over the last five years, keeping BS lean.”

Investment rationale

The brokerage in its research report has reported that “Ipca has had a strong execution track record in the past years along with maintaining healthy balance sheet (low net D/E) despite an investment phase. Even without the US, Ipca is likely to report double-digit growth as: a) main domestic therapies pain and CVS continue to post market-leading growth; b) API exports to remain strong as Ipca bolsters sartans over its existing portfolio; and c) recovery in generics led by EU. Ipca has a moat w.r.t. cost leadership in several APIs, enabling it to be the cheapest supplier in the world. With domestic and APIs contributing ~70% to revenue, Ipca deserves to trade at a premium.”

Buy Ipca Laboratories With A Target Price of Rs. 2,530

The brokerage has stated that “The unprecedented input cost escalation should start easing over the next six months. Ipca is confident of maintaining its volume in sartans as it has developed a new process and expects orders in the rest of the API business to also pick up. Near-term pressures should not obscure its market-beating growth in India, its vertically integrated business model, API potential beyond FY22 due to capacity addition and an enviable cost optimisation track record.”

According to the brokerage’s call “Ipca has been a beneficiary of several one-offs such as HCQs during covid and sartan opportunities in API. Hence, while FY22 growth looks challenging, FY23 should see normal growth resuming. We stay optimistic on Ipca’s long-term prospects. Retain ‘BUY/SO’ with a TP of INR2,530.”

Disclaimer

The stock has been picked from the brokerage report of Edelweiss Securities Limited. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

The brokerage’s take on Coal India Ltd.

Edelweiss Securities in its research report has said that “CIL’s Nov-21 production/offtake rose 4.3%/10.3% YoY. Key points: i) Production rate at 1.79mt/day is the highest ever for the month of November. ii) Demand remained buoyant with the offtake rate at 1.89/day-significantly higher than in the past. iii) Pithead inventory reduced further to merely 29mt (Mar-21-end: 97mt) as demand outpaced production. iv) SECL/WCL showed a significant performance uptick while MCL continued to be the best-performing subsidiary. In our view, CIL’s performance is likely to get a leg-up from the most profitable and productive subsidiaries – MCL, SECL and NCL – ramping up production. As a result, we expect our FY22E offtake of 643mt (up 12% YoY) to be met.”

The brokerage has claimed that “We expect CIL’s cash accretion to continue mainly due to higher sales volume and e-auction prices. On the working capital front, inventory continues to decline and receivables remain under check. Hence, we expect cash accretion to sustain in H2FY22. We believe that our FY22 divided estimate of INR18/share (dividend yield: 11.3%) is likely to be met, particularly in light of the first interim dividend of INR9/share.”

Buy Coal India Ltd. with a target price of Rs. 210

According to the brokerage’s research report “Despite a rather lackluster H1FY22 performance, we expect FY22 to be salubrious for CIL mainly due to volume growth and higher e-auction prices. On the working capital front, we already see a significant respite as both receivables and inventory has declined. We believe that significant cash balance/accretion would be utilised towards the payment of dividends. We believe that the ensuing wage hike is likely to be offset by price increase of regulated coal, and be EBITDA-neutral in the worst case.”

The brokerage has further claimed that “We maintain ‘BUY/SO’ on CIL with an unchanged TP of INR210 on 9x FY23E EPS. Our recommendation is also driven by a potential dividend yield of 11-13% over the next two years.”

Disclaimer

The stock has been picked from the brokerage report of Edelweiss Securities Limited. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

Tamil Nadu Transport Development Finance Corporation Fixed Deposits Interest Rates (Non senior citizens, regular interest income)

Tamil Nadu Transport Development Finance Corporation Fixed Deposits Interest Rates (senior citizens, regular interest income)

The interest rates are as on December 3, 2021. This is a government of Tamil Nadu backed enterprise and hence the deposits are very safe. The deposits are also available under the cumulative scheme, where the interest rate is more or less the same, but, the yields could go higher because of compounding.

Other details of the Tamil Nadu Transport Development Finance Corporation Fixed Deposits

The deposits cannot be opened online and one may have to visit the office or courier the fixed deposit forms, duly filled-in with the KYC requirements. Under the money multiplier scheme the deposits are compounded quarterly. The company is a good profit making enterprise that has been generating profits since 1975.

These deposits are relatively safe, but, the only problem right now is that there is no online facility. Therefore, it would be beneficial for those staying in Tamil Nadu and who can visit the office and open the fixed deposits. For other set of investors the task maybe a little more painful.

However, with the interest rates going as high as 8.77% and if you have a big amount, even travelling to Tamil Nadu to open the deposits maybe worth.

Invest in these deposits for the long-term

It is unlikely that interest rates in the economy would rally higher any time soon. It is therefore imperative to block money at higher interest rates for a longer term tenure. For example, senior citizens can get as high as 8.77% on the 5-year deposit. It is therefore advisable to go for the 5 year tenure period. We believe that in an era where even the Senior Citizens Savings Scheme is able to offer only 7.4% interest for senior citizens this is not a bad option at all. Apart from this the Tamil Nadu Transport Development Finance Corporation is a wholly owned company of the government of Tamil Nadu.

There is another company called the Tamil Nadu Power and Infra Finance company, where the fixed deposit interest rate offered is as high as 8.5%. This company interestingly has online facilities and investors can open their fixed deposits online. Those who are long term investors should apply for these deposits. The Reserve Bank of India is unlikely to hike interest rates anytime soon and the current rates being offered of upto 8.5 to 8.77 per cent is not bad at all. It’s hard to get returns on fixed deposits these days.

Record date for the interim dividend pay-out for Fy 2022

For the announced dividend, the company has also decided the record date and fixed it as Wednesday the 15th December 2021. The record date is the date when the company finds out or determines the eligibility of the shareholders who will be entitled to receive this dividend pay-out. On this record date, you or a shareholder must be having shares of this company in his demat account for the dividend payment to be credited against these shares in due time.

Rs. 9.01/share dividend pay-out soon by this company

If you could not still make it out, the company we are talking about is NMDC or NationalNational Mineral Development Corporation. The divestment in this PSU major kicked off in July this year via the OFS or auction route. In the stake sale, the centre looked at selling 7.49 percent stake in the firm.

To know about other companies to pay-out dividend soon read here.

About NMDC and its dividend history

Incorporated in 1958 as a Government of India fully-owned public enterprise, NMDC is under the administrative control of the Ministry of Steel. Since inception, the company is into the exploration of an array of minerals including iron ore, copper, rock phosphate, lime stone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, beach sands etc. The company is the country’s single largest iron ore producer. Talking about its scrip, the company commands a share price of Rs. 145.95 and has a market capitalisation of Rs. 42,772 crore.

The company has been consistently making dividend pay-outs and considering the last fiscal year’s dividend of 7.76 per share, the dividend yield turns out to be 5.32 percent which is quite impressive.

Disclaimer:

Note we are just putting before readers a stock that has announced a dividend, nonetheless readers should not misread it as a call for investment into the scrip.

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