Category: Personal Finance

Buy Eicher Motors Stock

Emkay Global has recommended buying the stock of Eicher Motors in its high conviction buy list. According to the brokerage firm, the order book is healthy at over 150,000 units, supported by Classic 350 and Meteor 350 models.

“Production levels are improving on a sequential basis, and Q3/Q4 volumes are likely to be higher than Q2 levels. Several new models are in the pipeline, and one new model or major refresh will be launched every quarter. All new products will have customization options.

The store count stands at 2,105 units now, with 1,053 large stores and 1,052 studio stores,” the brokerage has said.

According to Emkay Global, the Management expects to continue expansion with the addition of 300-400 stores annually to improve penetration. Export remains a focus area, with a presence in 149 exclusive outlets and 650+ multi-brand stores. Exclusive store count will be expanded to 175 by FY22-end.

“We expect a robust earnings CAGR of 42% over FY22-24E, supported by the sales upcycle, market share gains and margin expansion. We have a Buy rating on Eicher with a Dec’22 target price of Rs 3,100, based on 23x P/E for the 2W business,” the brokerage has said.

Buy ICICI Bank stock

Emkay Global is also bullish on the stock of ICICI Bank. “We expect the overall asset quality experience for ICICI Bank in the current cycle has been far better than market expectations, given its better quality retail portfolio built largely around captive customers, and as the lumpy corporate NPA cycle is largely behind.

Healthy demand resolution, lower restructuring pool and higher provisioning buffers are added positives,” the brokerage has said.

“After long, ICICI Bank has credible and stable top management with unwavering focus on sustainable profitability vs. growth, which we believe deserves due recognition amid the spate of management rejigs in large peers. Valuations too look reasonable, thus we recommend strong Buy on ICICI Bank with a target price of Rs 950 (top pick in banking space),” the brokerage has said.

Buy Infosys stock, says Emkay Global

Emkay Global also has a buy call on the stock of Infosys. According to the firm, strong revenue momentum with stable margins, continued market share gains, strong deal intake, robust cash conversion and healthy payout (85% of FCF over a 5-year period) should support higher valuations.

“Revenue growth momentum and stable margins should drive 17.1% CAGR in earnings over FY21-24E. We expect ROE to improve from 27.1% in FY21 to 32.5% in FY24E. We have a Buy rating on Infosys with a Dec’22 target price of Rs 2,100 (30x Dec’23E EPS),” the brokerage has said.

Maruti Suzuki

Emkay Global also remains upbeat on India’s largest passenger car makers, Maruti Suzuki. “The order book is healthy at over 200,000 units. Production levels are improving on a sequential basis, and Q3/Q4 volumes are likely to be higher than Q2 levels. Led by improving macros, pending order book and new products, we expect a 19% CAGR in volumes over FY22-24E.

In the next 2-3 years, major launches could include new Brezza, Jimny UV, above 4m UV and new MPV, among others.

“We remain positive on Maruti Suzuki due to expectations of cyclical upturn, which generally lasts for at least 3 years. We have a Buy rating with a Dec’22 target price of Rs 8,750, based on 27x core P/E on Dec’23E estimates, backed by DCF model and net cash of Rs1,445 per share,” the brokerage has said.

First, a caution before investing in equity mutual funds

Before we inform readers of the two mutual fund schemes, let us warn readers that these are equity mutual funds, so the risks remain high. The last 1-month has shown us immense volatility and the markets are now down, thanks to the spread of a new covid variant called the Omicron.

Having said that the markets are trading at a significant premium to long-term averages and are hence expensive. It is therefore our suggestion to just stick to SIPs, so even if the markets fall investors can average their acquisition of units, by buying at lower rates. We have been advocating SIPs only given that the markets have jumped sharply in the last 1-year.

Mirae Asset Emerging Bluechip Fund

This fund has a gold rating from Morningstar. Mirae Asset Emerging Bluechip Fund looks to generate for unit holders by investing in a diversified portfolio predominantly in equities and equity related securities of large cap and midcap companies at the time of investment.

A Rs 10,000 monthly SIP for 36-months would have generated a portfolio value of Rs 5.71 lakhs now. This means an investor would have invested Rs 3.6 lakhs, which would have generated a portfolio value of Rs 5.71 lakhs.

The net asset value under the growth plan for Mirae Asset Emerging Bluechip Fund is Rs 97.47. An SIP will not cost much for an investor and one needs only a sum of Rs 1,000 every month to start an SIP. Mirae Asset Emerging Bluechip Fund has holdings in stocks like ICICI Bank, HDFC Bank, Infosys, Axis Bank and State Bank of India.

Aditya Birla Sun Life Frontline Equity Fund

This is another fund that has a gold rating from Morningstar. The fund has generated a 1-year returns of almost 35%, while the 3-year returns are 16.42% and the 5-year returns are 14.95% on an annualized basis. The assets under management of the fund is almost Rs 22,461 crores. Almost the entire portfolio is invested and there is very little cash and cash holdings currently with the fund.

Individuals can start an SIP in Aditya Birla Sun Life Frontline Equity Fund with a small amount of Rs 100 every month. The fund has holdings in stocks of ICICI Bank, Infosys, HDFC Bank, Reliance Industries and Bharti Airtel. The net asset value under the growth plans is Rs 339.42. Investors who wish to invest for a period of 3-5 years should consider the Aditya Birla Sun Life Frontline Equity Fund.

Disclaimer

Investing in equity mutual funds is risky and investors are advised caution. Invest only if you have an appetite to take risk. Please be informed neither Greynium Information Technologies Pvt Ltd nor the author are liable for any losses caused as a result of decisions based on the article.

1. Bajaj Steel:

Nagpur based entity on June 29, 2021 announced a final dividend of 60 percent amounting to Rs. 3 per share for the Fy 21. For the said dividend the stock shall turn ex-dividend today i.e. December 2, 2021, while the record date is December 4.

The company has been consistently paying dividend and considering the last dividend and the current market price of Rs. 825 per share, dividend yield comes to be barely 0.36 percent.

Established in 1961, the Nagpur based company is the only company globally that is into manufacturing machineries for all of the cotton grinning technologies, all pressing technologies, Up Packing & Horizontal Packing, as well as Seed Cleaning, Delinting & Decorticating, other than general engineering fabrication, machining, intelligent electrical panel manufacturing and various other engineering activities.

2. Coal India:

The mining and minerals PSU major on November 23, 2021 announced an interim dividend for the FY22 of 90% amounting to Rs. 9 per share of the face value of Rs. 10. This is higher in comparison to Rs. 7.5 apiece announced last year. For the Fy21 considering the dividend pay-out of 160% (Rs. 16 per share) and current share price of Rs. 156.55, the scrip’s dividend yield turns out to be an impressive 10.22%. Since 2011, the company has declared dividend 19 times.

For the Fy22 interim dividend, the stock shall turn ex-dividend on December 6, while record date for it is December 7. “The date of payment of ‘Interim Dividend’ is ‘on and from 21st Dec’ 2021′”, said the company’s exchange filing.

Edelweiss and Motilal Oswal have signalled a ‘Buy’ on the scrip of Coal India for a price target of up to Rs. 210 per share.

The PSU entity is the biggest coal producing company globally. Other products of the company include non-coking coal as well as coking coal of different qualities for varied purposes. The company primarily caters to thermal power producing entities, steel and cement producers as well as other industrial organisations.

3. TT Ltd.:

This textiles-hoisery and knitwear company informed that in its meeting held on December 1, the company’s board has approved interim dividend payment @ 10% i.e. Rs. 1 per share for the fiscal year 2022. Record date for the dividend is Decmeber 10, 2021. “The said interim Dividend will be credited / dispatched to all shareholders within 30 days from date of declaration”, added the release.

TT Ltd. Is the flagship company of th T.T. Group. The company from the knitwear segment was the first to go public. The company offers the complete range of textile sector including yarn, fabric, cotton, garments and accessories.

4. Oriental Aromatics:

This chemicals company declared an interim dividend of 30 percent for the Fy 22. Ex-dividend and record date for the same is December 9 and December 10, respectively. The interim dividend amounts to Rs. 1.5 per share. Last fiscal year the company declared a dividend of Rs. 2.5 per share. The closing price of the scrip as on December 2, 2021 has been Rs. 769.20 per share. For the last several years, the company has been consistent in paying out dividends.

Formerly known by the name Camphor and Allied Products is the world’s top integrated companies with 4 major divisions within its business namely camphor, flavour, fragrance and aroma chemicals.

5. BNK Capital Markets:

The company from the financial market space announced a final dividend of 25% amounting to Rs. 2.5 per share. Record date for the same is December 10, while the company shall go ex-dividend on December 9, 2021. The announcement in respect of the dividend was made on June.

The company has been consistent in paying dividend. BNK Capital is an NBFC firm engaged in financial activities such as investment banking, corporate finance distribution business and other advisory related services. Under its boutique based service oriented business model, the company’s offering encompass equity Broking ,Commodities Broking ,Currencies Broking ,Internet Based Trading in Securities, Commodities and Currencies ,Depository Services, Wealth Management Services, Distribution of Financial Products, Corporate Finance and Advisory and Research.

Should you be buying shares ahead of dividend declaration?

Though investors can be lured to buy into a stock ahead of its dividend declaration and sell it off after the dividend pay-out, the same is not recommended. However this in itself is a strategy referred to as ‘dividend stripping’. Herein investors stand to benefit by way of tax benefits. Notably, upon dividend pay-out, the company’s share price falls and for the investor who sells the scrip post the share price fall implies that he or she can book capital loss. And this can further be set-off against income and help lower down the investors’ net tax payable amount.

Further if not for taxation advantage, one needs to be diligent in picking dividend paying stocks as one can choose:

1. Dividend paying stocks with a dividend yield of over 3 percent.

2. Dividend pay-out should be over 40 percent i.e. the proportion of earnings that the company pays out to its shareholders.

3. Choose on a dividend paying scrip with a clearly drawn dividend policy.

Disclaimer:

In the article we have just collated the stocks that will be making dividend in some time as their record date falls in the month of December. Remember from the record date it usually takes a month time for dividend to be credited into your account. As say for BPCL the record date was September 16 and the dividend of Rs. 58 per share was credited on October 25, 2021.

Further, note the story above listing stocks paying dividends in due time, should be considered as a call to invest in these stocks, investors need to engage in their own due diligence and research.

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