Category: Personal Finance

How Crisil rates mutual funds?

Crisil Mutual Fund Rank covers various categories across equity, debt and hybrid asset classes. Unlike most other ranking models, which are based purely on returns or net asset value (NAV), Crisil Mutual Fund Rank uses a combination of NAV and portfolio-based attributes for evaluation. This provides a single point analysis of mutual funds, taking into consideration key parameters such as risk-adjusted returns, asset concentration, liquidity and asset quality.

The ranks are assigned on a scale of 1 to 5, with CRISIL Fund Rank 1 indicating ‘very good performance’. In any peer group, the top 10 percentile of funds are ranked as CRISIL Fund Rank 1 and the next 20 percentile as CRISIL Fund Rank.

PGIM India Flexi Cap Fund – ranked No 1 by Crisil

This fund has generated returns of 68% in the last 1-year. The 3-year returns are 31.26%, while the 5-year returns are 21.37%. This is pretty good and compares well with most other funds in its category. It must be noted that the returns are good, thanks to an upsurge in the Indian and the global stock markets over the last 1-year.

One can start a Systematic Investment Plan under the fund with a small sum of Rs 1,000 every month. This fund has invested as much as 97% in stocks and the balance in debt instruments. Flexi cap funds are funds that tend to invest across market capitalizations and hence offer the fund manager some dynamism in managing the portfolio. PGIM India Flexi Cap Fund has holdings in stocks like Infosys, ICICI Bank, L&T and HDFC.

UTI Flexi Cap Fund

This is another fund that is ranked NO 1 by Crisil. The returns are slightly lower than that of PGIM India Flexi Cap Fund and the 1-year returns are placed at around 58.67, while the annualized while the 3-year returns are around that 21% mark.

The fund has holdings in stocks like Bajaj Finance, HDFC Bank, L&T Infotech, Kotak Mahindra Bank, HDFC and Infosys. One can start an SIP with a small sum of Rs 500 each month in the UTI Flexi Cap Fund.

The fund has invested as much as 97.6% in equities and the balance is held in cash. We believe that investors who are looking at a long-term can invest in these funds.

Avoid lumpsum investment

We at goodreturns.in have been telling investors to stay cautious on the markets with the Sensex at 60,000 points. Most analysts believe that the markets are over priced at the current levels. In fact, according to one brokerage firm the markets are at a premium to long term averages by almost 15 to 20%. Therefore, please be careful even while investing in mutual funds.

Disclaimer

Investors are advised caution as investing in mutual funds is risky. The report is for informational purposes and Greynium Information Technologies, the author and the brokerage would not be responsible for any losses incurred by investors based on the report above

Buy Greenpanel Industries, Sharekhan says

The brokerage is bullish on the stock of Greenpanel Industries and sees an upside to Rs 510, as against the current market price of Rs 399. Greenpanel is India’s largest manufacturer of wood panels.

Greenpanel reported stupendous performance for Q2FY2022 outperforming on the revenue and OPM front by a wide margin.

“Consolidated revenues grew by 88% y-o-y to Rs. 422 crore led by 103% y-o-y jump in MDF revenues (volume/realizations growth of 67%/22% y-o-y) at Rs. 349 crore. Plywood revenues were up 38% y-o-y led by volume/realizations growth of 22%/13% y-o-y to Rs. 73 crore. Consolidated OPM at 26.8% (+619bps y-o-y) was led by operating leverage, higher value added product share and higher realizations (both domestic and exports). The company expects growth momentum to continue with 1.2 lakh cubic metres capacity coming on stream in Q3FY2022 and expects blended capacity utilization to be at 90-95% for FY2022. The OPM too are expected to remain elevated,” the brokerage has said.

Valuation of Greenpanel and view by Sharekhan

The company’s limited capex requirement towards brownfield expansions, strong operating cash flow generation, tight working capital management and reducing leverage would propel its return ratios over FY2021-FY2024E.

“The company is currently trading at a P/E of 16x its FY2024E earnings, which we believe is quite attractive considering over 60% CAGR in net earnings expected over FY2021-FY2024E. Hence, we retain our Buy rating with a revised price target of Rs. 510 led by upward revision in estimates,” the brokerage has said.

Buy Hitech Pipes For 18% to 20% returns

The broking firm has also set a target price of 18 to 20% higher against the current market price of Rs 624 on the stock of Hitech Pipes.

“The company reported better than expected performance for Q2FY2022 on account of higher than anticipated realizations while volumes disappointed. The consolidated net revenues grew 21% y-o-y to Rs. 461 crore led by 60.5% y-o-y rise in realizations at Rs. 71,149/tone while volumes dipped 24.7% y-o-y at 64,765 tons.

The volumes were affected by the postponement of orders from contractors due to high steel prices and monsoons domestically while export order were affected by logistics issues. However, EBITDA/tone stood strong at Rs. 3742/tone (up 68% y-o-y) led by higher realizations, higher share of value added products and inventory gains. The consolidated operating profit/net profit grew by 26.6%/54.6% y-o-y,” the brokerage has said.

Valuation and view on Hitech Pipes

According to Sharekhan, the company’s debt-free capacity expansion plans over the medium to long term are expected to capture the huge growth potential for the domestic steel pipe industry.

“At the current market price, the stock is currently trading at a P/E of 8x its FY2024E EPS, at a discount to its peers. We expect valuation multiple gap vis-à-vis peers to narrow down as Hitech ramps ups net earnings driven by healthy topline growth and strong operational profitability. Hence, we retain our positive view on the stock and expect an upside of 18-20%,” the brokerage has said.

Disclaimer

Investors are advised caution as investing in equities is risky. The report is for informational purposes and Greynium Information Technologies, the author and the brokerage would not be responsible for any losses incurred by investors based on the report above.

Q2FY22 results of Muthoot Finance

According to IDBI Capital Muthoot Finance (MUTH) reported lower growth in gold AUM at 18% YoY vs 29% YoY (Q1FY22), overall cons. AUM grew by 17% YoY; management maintained the guidance of 15% growth for FY22. Profitability growth was lower at 11% due to higher provisions. NII grew by 14.5% YoY led by a decline in margins; while PPoP grew by 17% YoY led by lower operating expenses.

The brokerage has said “Provisions of MUTH increased by 595% YoY (up 121% QoQ) due to asset quality deterioration. Stage III loan assets increased to 1.9% vs 1.2% QoQ, while the Company carries excess provision of Rs2.95bn in the balance sheet.”

Key Highlights and investment rationale for Muthoot Finance according to IDBI Capital

Gold AUM growth slows down: Gold Loan AUM growth slows down to 18% YoY (up 5% QoQ) vs 29% YoY (Q1FY22) due to high base effect (32% YoY Q2FY21). Gold holdings grew by 9% YoY (up 4% QoQ) to 178 tonnes, whereas loan per 1gm of gold has increased by 7% YoY (up 1% QoQ) to Rs3,098. Management continues to guide gold loan growth to 15% YoY for FY22 on a conservative basis.

Asset quality deteriorates: Stage III loans have increased during the quarter at 1.9% vs 1.2% QoQ, which is not a cause of concern because of being backed by higher collateral. The company carries an extra provision of Rs2.95bn and an overall of Rs9.45bn (standalone business).

Margins improved sequentially: NIMs improved by 53bps QoQ to 13.46% due to a rise in yields on loans along with a decline in the cost of funds during the quarter. Similarly, spreads have also risen to 12.64% vs 12.21% QoQ.

Outlook: Given the competitive environment, management maintained guidance of 15% YoY growth for FY22. The best part in Gold finance portfolio is although NPA may inch higher; the lender can auction and recover much better as compared to other asset classes.

IDBI Capital’s take on Muthoot Finance

Muthoot Finance plans to maintain its NIMs and spreads (current NIM at 13.46% and interest spread at 12.64%) and the Gold loan AUM currently stands at INR546,821mn as of September 2021. If the gold loan volume grows per branch, OPEX will not go up proportionately (certain expenses fixed), extra staff may increase, says the brokerage’s report according to the management.

IDBI Capital has said that “We believe that MUTH with ~90% of AUM in the Gold loan portfolio has a lower risk of loss of assets versus other NBFCs. We have moved to FY24E estimates and maintained ‘BUY’ rating with a new TP of Rs.2,000 (earlier Rs.1,790), valuing it at 3x P/ABV FY24E.”

Disclaimer

The above stock is picked from the brokerage report of IDBI Capital. 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.

1. Radhe Developers:

This penny realty stock just a year back quoted at a price of Rs. 9 per share and now trades at Rs. 200.3, offering 2132 percent in just 1-year time frame.

The construction and contracting-housing firm is based out of Gujarat and offers residential, commercial, weekend homes & plotted projects.It has niche in various aspects like Design, Sustainability & Customer Satisfaction .The Group is currently developing an estimated million sq ft of prime real estate development and has 3 ongoing projects across Ahmedabad.

The stock’s current m-cap is Rs. 504 crore.

2. Parsvnath Developers:

The stock of Parsvnath Developers gained 657 percent in the last one year. Its year to date return have been 256 percent.

In the previous June ended quarter the company’s sales grew 60 percent year on year to Rs. 16 crore. The company however posted net loss of Rs. 35.87 crore during the quarter, which reduced sequentially.

The stock saw a number of positives in the ongoing fiscal year including release of pledged shares, promoter buying the scrip. As of September 2021 quarter, the promoter stake in the firm has remained constant and increased from March to 69.14 percent.

3. Anant Raj:

Previously referred as Anant Raj Industries is a Delhi-based construction & development company formed in early 1970s.. It is also one of the largest Land Bank / Property Owners of Delhi NCR. Its Businesses include:

• Residential Townships, Group Housings

• Commercial Developments

• IT Parks

• Malls / Office Complexes

• Affordable Housings

• Data Centers

• Hospitality / Serviced Apartments.

The company stock in the last one year has surged 318% while its YTD returns have been to the tune of 177%. The company’s latest m-cap stood at Rs.2213 crore.

4. PNC Infratech:

The stock quoting at a price of Rs. 337 has recorded a surge of 102 percent in the last 1-year. It is one of the premium construction company into the area of construction of highways, runways, bridges, flyovers, power transmission lines. Also the company is a ISO 9001:2008 certified company for its well defined quality system. The company has carried out the construction of high-value EPC turnkey projects.

Besides there are other small cap stocks from the space including Indiabulls Real Estate, Purvankara, Ajmera Realty, Vascon, Hubtown and Dhrun Consultancy that have reaped multibagger returns during the time frame.

Disclaimer:

Here the list has been collated only to provide the scale to which the realty stocks particularly small caps have rallied during the period. Readers should not construe it to be a call for buying in these shares.

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