Buy This Appliances Stock For +16% Return, In 6 Months: HDFC Securities Recommends

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Target Price

The Current Market Price (CMP) of Butterfly Gandhimathi Appliances Ltd. is Rs. 874.85. The brokerage firm, HDFC Securities has estimated a Target Price for the stock at Rs. 1016. Hence the stock is expected to give a 16.13% return, in a Target Period of 6 months.

Stock Outlook
Current Market Price (CMP) Rs. 874.85
Target Price Rs. 1016
6 months 16.13%

Company performance

Company performance

Butterfly Gandhimathi Appliances Ltd. (BGAL) reported the highest quarterly revenue and profitability in Q2FY22 with revenue at Rs. 403.1 crore, +39.6%/179.2% YoY/QoQ. Kitchen appliances and Cooker/Cookware both saw a robust increase in revenue, up 39.1% and 62.7% YoY respectively. On the back of such strong topline numbers, the company revised its revenue growth guidance for FY22 from ~10-15% to ~20-25%. The company reported an EBITDA of Rs. 46.5 crore (up 35.7% YoY).

Comments by HDFC Securities

Comments by HDFC Securities

According to HDFC Securities, “BGAL has a strong foothold in the Southern market and an extensive distribution comprising 500+ exclusive distributors catering 25,000+ retail points across India. We expect it to maintain a RoCE of 30%+ in FY24E. We expect revenue and earnings to grow at CAGR of 17.7% and 34.4%, respectively, over FY21-24E.”

About the company

About the company

Butterfly Gandhimathi Appliances Limited (BGAL) is a leading manufacturer of Kitchen and Electrical Appliances, and it will be one of the biggest beneficiaries of the continued growth in the domestic kitchenware segment. The strong historical patronage of the “Butterfly” brand, continuous innovations, and premium quality products will support revenue growth.

Disclaimer

Disclaimer

The above stock was picked from the brokerage report of HDFC Securities. 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.



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SBI, Adani Capital enter co-lending agreement, to target farmer customers, BFSI News, ET BFSI

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State Bank of India has signed a co-lending agreement with Adani Capital Pvt Ltd to cater to their farmer customers and increase overall efficiency in farm operations, the bank said in a statement.

SBI and the non-bank lender arm of Adani Group will co-lend to farmers, so that it can help them purchase tractor and farm implements.

“We are pleased to associate with Adani Capital under the co-lending program. This partnership shall help SBI to expand its customer base as well as connect with the underserved farming segment of the country and further contribute towards the growth of India’s farm economy. We will continue to work with more NBFCs in order to reach out to maximum customers in far flung areas and provide last mile banking services,” said Dinesh Khara, chairman of SBI.

The Reserve Bank of India had issued guidelines on co-lending schemes for banks and non-bank lenders for priority sector lending to improve flow of credit to underserved sectors of the economy. The scheme aims to make funds available at affordable costs to borrowers.

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Capital expenditure by Central and State governments crossed their pre-pandemic levels faster than GDP: Crisil

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The capital expenditure by Central and State governments have crossed their pre-pandemic levels faster than the gross domestic product. While Covid necessitated huge spends by governments around the world, there was a simultaneous decline in their revenues, which led to higher fiscal deficit and debt, said a study by Crisil Ratings.

India’s fiscal deficit widened to 9.4 per cent of GDP in fiscal 2021 from 4.6 per cent logged in fiscal 2020. Despite this, the Central government capex was 31 per cent higher year-on-year this fiscal while that of States registered a modest rise over the low base of fiscal 2020.

The State capex is typically 1.4 times higher than that of Central government, thereby playing the predominant role in infrastructure building. This fiscal, the Centre has begun pruning certain spends, mainly revenue expenditure, as pandemic-related relief measures are rolled back, even as revenue collections have improved.

In the first half of this fiscal (April-September), the Centre had spent 41 per cent of its budgeted target for the entire year. On the other hand, State governments have managed to spend 29 per cent of their targets.

Govt capex

Government capex for April-October was ₹2.5 lakh crore. This is 28 per cent higher year-on-year (on a low base) and 26 per cent higher than the pre-pandemic, or fiscal 2020, level for the same period

Major capex has gone into road transport and highways, railways, housing, telecommunication, and health. Separately, rural development spending on rural roads, housing, and other infrastructure showed a 14 per cent increase over pre-pandemic levels, said the report.

In the first half capex of 16 States rose 78 per cent year-on-year. It was 17 per cent higher than in the same period pre-pandemic. These states had spent 29 per cent of their budget estimates in the first half.

While this might seem low, States typically tend to spend most of their capex budgets towards the end of the year.

Of the 16 States, six (Chhattisgarh, Kerala, Madhya Pradesh, Punjab, Rajasthan and Telangana) achieved the target set by the Ministry of Finance of spending 45 per cent of budget estimates by the first half.

This makes them eligible for availing of additional borrowing of 0.5 per cent of gross state domestic product for incremental capex in this fiscal.

On the other hand, Maharashtra, Odisha and Jharkhand lagged, having spent less than 20 per cent of budgeted capex in the first half.

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Private banks cut more rates than PSBs as overall rate transmission improves, BFSI News, ET BFSI

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Rate transmission, the pet peeve of the Reserve Bank of India has improved substantially following the introduction of external benchmarks with the private banks sniping more than public sector peers.

The overall lending rates have fallen as much as 100 basis points, with the weighted average lending rates for outstanding rupee loans of commercial banks fell 96 basis points between March 2020 and October 21, according to RBI data.

But these rates have fallen more sharply for private sector banks at 109 basis points compared to 85 bps dip for public sector banks and 187 bps for the foreign banks in the country.

The central bank has however cut its benchmark repo rate much higher by 115 bps during the period, and also introduced a number of measures to enhance liquidity of banks to deal with the pandemic induced crisis.

Policy transmission

Policy transmission has been at a much faster pace since the pandemic. In the 19-month period prior to the onset of the pandemic, the benchmark policy 135 bps. But the banks lowered their lending rates only by 15 basis points between March 2019 and March 2020.

A research paper by the Reserve Bank of India economist notes that the transmission of policy repo rate changes to deposit and lending rates of commercial banks (SCBs) has improved since the introduction of external benchmark-based pricing of loans.

The paper said that the transmission showed further improvement since March 2020 on account of sizeable policy rate cuts, and persisting surplus liquidity conditions resulting from various system level as well as targeted measures introduced by the Reserve Bank – cut in the cash reserve ratio (CRR)

requirements, long-term repo operations (LTROs), TLTROs, refinancing window for All India Financial Institutions (AIFIs), sector/segment specific liquidity measures (Mutual Funds, Small Finance Banks, Micro Finance Institutions/Non-Bank Financial Companies), special open market operations and regular OMOs.

External benchmarks

The share of external benchmark-linked loans in total outstanding floating rate loans increased from 2.4 per cent in September 2019 to 32 per cent in June 2021, contributing to a faster and fuller transmission.

There has been a concomitant fall in the share of MCLR-linked loans from 83.6 per cent to 60.2 per cent, over the same period, although these still have the largest share in outstanding floating rate loans.

As lending rates under the external benchmark regime undergo automatic adjustments with the changes in the benchmark rate, banks are incentivised to adjust their term as well as saving deposit rates to cushion their net interest margins and profitability, which then hastens the adjustment in banks’ marginal cost of funds, and MCLRs.

Earlier hurdles

While the Reserve Bank has periodically refined the process of interest rate setting by banks, transmission has hitherto been sluggish as banks relied on their own cost of funds, which is internal benchmarks.

“The systems were also characterised by opacity, especially regarding the interest rate resetting practices for existing borrowers,” the central bank said.

To address these rigidities, the RBI had decided to move to an external benchmark system – an interest rate outside the control of a bank and not necessarily linked to its internal costs – for select categories of loans (viz., all new floating rate personal or retail loans and floating rate loans to micro and small enterprises (MSEs) to the policy repo rate or 3-month or 6-month T-bill rate or other specified benchmarks effective October 1, 2019, and for medium enterprises effective April 1, 2020).



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Sensex jumps 214 points in early trade; Nifty tops 17,220, BFSI News, ET BFSI

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MUMBAI: Equity benchmark Sensex jumped over 214 points in early trade on Thursday, tracking gains in index majors HDFC twins, Reliance Industries and Maruti amid largely positive cues from Asian peers.

The 30-share index was trading 214.43 points or 0.37 per cent higher at 57,899.22 in initial deals. Similarly, the Nifty rose 53.95 points or 0.31 per cent to 17,220.85.

M&M was the top gainer in the Sensex pack, rising 2.38 per cent. HDFC, PowerGrid, Titan, Sun Pharma, Maruti, HCL Tech and Reliance Industries, were among the other gainers.

On the other hand, L&T, ICICI Bank, Nestle India, Axis Bank and Tech Mahindra were among the losers.

In the previous session, the 30-share BSE Sensex rallied 619.92 points or 1.09 per cent to close at 57,684.79. Similarly, the NSE Nifty surged 183.70 points or 1.08 per cent to 17,166.90.

Elsewhere in Asia, bourses in Shanghai, Hong Kong and Seoul were trading with gains in mid-session deals, while Tokyo was in the red.

Stock exchanges in the US ended with losses in the overnight session.

International oil benchmark Brent crude rose 1.07 per cent to USD 69.61 per barrel.

Meanwhile, India’s merchandise exports rose 26.49 per cent year-on-year to USD 29.88 billion in November on better performance by key sectors, while the trade deficit hit a record high of USD 23.27 billion as imports of crude oil and gold spiked.

Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 2,765.84 crore on Wednesday, as per exchange data.



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How gamers are at the risk of cyber attacks, BFSI News, ET BFSI

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The rising cybercrimes are now targeting gamers using a crypto-mining malware called Crackonosh. The research shows this crime has so far made more than $2 million for hackers.

But it’s not targeting any gamers. Games that are “cracked” pirate copies of popular games come infected with this malware script, allowing hackers to secretly mine cryptocurrencies using the victim’s resources. These games include Grand Theft Auto V, Pro Evolution Soccer 2018, Jurassic World Evolution, and NBA 2K19 available for free on forums or torrent.

So, how does this exactly work?

The crime is called cryptojacking, and the way it works is by embedding malware on a computer or mobile device to steal its resources and mine cryptocurrencies.

Since mining cryptocurrencies use a considerable volume of electricity and need a high-performing PC to solve a critical mathematical equation, this attack risks gamers. So by using gamers’ high-performance resources from computers, hackers earn cryptocurrencies without bearing the overhead cost. The malware script works secretly in the victim’s computer and doesn’t get noticed easily. However, the symptoms of a victim are slowed down PCs and spike in electricity bills.

Moreover, the attack goes unnoticed by the user because once Crackonosh is inside the system, it modifies the computer’s registry to allow it to run in safe mode. This disables most antivirus software. It then boots the computer into a safe mode. Further, it replaces the Windows Security icon in Windows 10 with a fake one and disables other security software.

The malware creator is believed to be Czech because the name Crackonosh means “mountain spirit” in Czech culture. What’s more alarming is the fact that Avast, a cyber-security company, is now detecting over 800 cases on computers each day. But these are registered cases of computers that have Avast installed, meaning the spread of these crimes could be much higher.

Thus, this situation implies that there’s nothing like free lunch. Even though the games are free, the user eventually ends up paying a heavy sum for it. Even though the cryptojacking scripts do not comprise a user’s personal data, it exploits CPU processing resources and electric power. Some scripts come with worming capabilities that infect and compromise other servers and devices on the network.

So, what can you do about this scenario?

Removing the malware from the computer is a lengthy and complex process. It requires deleting files, scheduled tasks, and even registry keys. Therefore, the best remedy to this situation is prevention.

The applications or games should be installed from only the legitimate gaming stores. Next, the updates should be done from the developer’s website only. This attack is only executed once the user downloads games from unofficial pages like torrent or other third-party applications.

Remember, the cure to such crimes is prevention, thus, maintaining healthy security habits like using original gaming stores, and downloading updates straight from the developers can help you mitigate these risks in the first place.

The author is Vice President – International Sales at Array Networks



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Ransomware top threat for Indians in 2021, crypto scams surge, BFSI News, ET BFSI

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New Delhi: Cybercriminals continued to exploit people’s screen habits formed during lockdown to spread scams and ransomware was the top threat for Indians in 2021, followed by crypto scams, a new report showed on Wednesday.

Cybersecurity researchers observed a 38 per cent increase in ransomware attacks targeting consumers globally, when comparing the last five months of 2021 to the first five months of the year, whereas for India, that number stands at 65 per cent.

On the mobile side, adware and fleeceware were among the top threats, according to global security company Avast.

“The pandemic has changed nearly every aspect of everyone’s lives, and that includes the cyberworld too,” said Michal Salat, director of threat intelligence at Avast.

“Attackers’ methods are becoming more sophisticated. Cybercriminals are using techniques that make them harder to spot and carrying out more personalised cyber attacks. They are also adding new spins on tried and tested techniques, especially in social engineering type of attacks like scams,” Salat added.

Businesses globally also experienced an increased number of attacks during the June-October period to the tune of 32 per cent.

However, for India, this number was less than the global average and stood at 19 per cent.

In general, phishing attacks continued to increase during 2021.

The chances of businesses encountering phishing scams has increased globally by 40 per cent in the last five months of the year but was much lower in India with 13 per cent.

“Consumers, too, continue to be targeted by phishing scams with the increase in global (24 per cent) and India (23 per cent) figures being nearly the same,” the report noted.

This year, a wide variety of new threats aimed at profiting from or mining cryptocurrencies at users’ expenses were reported.

Some of the main ones that impacted many countries around the world were Crackonosh, and BluStealer.

In addition to Crackonosh and BlueStealer, the researchers also found cryptocurrency-stealing malware that was distributed through HackBoss, a Telegram channel which, at the time of discovery, had stolen over $560,000 from victims.

In September, the researchers found more than 19,300 Android apps that potentially exposed user data due to an incorrect configuration of the Firebase database — an Android tool that developers can use with the purpose of storing user data.

This affected a wide range of different apps, including lifestyle, fitness, gaming, food delivery and mailing apps in regions around the world.

“Cybercriminals kept up many of their tricks this year, using social engineering to spread malware to get their hands on people’s money, abusing technology such as stalkerware to violate people’s privacy or deceiving vulnerable audiences into paying for fleeceware apps or unneeded tech support,” said Salat.



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This Government Company Offers Up To 8.77% Interest On Fixed Deposits

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Non cumulative, Senior Citizens interest rates as on Dec 2, 2021

24-months 36-months 60-months
Monthly interest payout 7.50% 8.25% 8.50%
Quarterly interest payout 7.50% 8.25% 8.50%
Annual payout 7.50% 8.25% 8.77%

The cumulative interest rates being offered for non senior citizens is also more or less the same. Under the cumulative scheme you also have an opportunity to invest for 1-year period. For a 5-year period the interest rates go as high as 8.77%, which is the latest and updated as on December 2, 2021.

Cumulative fixed deposits senior citizens and non senior citizens as on Dec 2, 2021

Cumulative fixed deposits senior citizens and non senior citizens as on Dec 2, 2021

Non senior citizens Senior citizens
1-year 7.00% 7.25%
3-years 7.75% 8.25%
4-years 7.75% 8.25%
5-years 8.00% 8.50%

This is the best interest rates that you can probably get from any government owned institution in India. We suggest that investors invest in these deposits through a friendly app that the company has made available online.

How to invest in the fixed deposits of Tamil Nadu Power?

How to invest in the fixed deposits of Tamil Nadu Power?

We visited the office of Tamil Nadu Power to invest in the deposits. There was a rush of people for the fixed deposits, given that it is now impossible to get 8.50% on fixed deposits and also that the deposits were safe as they are a state government owned company.

Interestingly, the company also has a well developed app, where you can download and apply for fixed deposits online. There is also a call centre to help you with any assistance that you might need.

Are the fixed deposits of Tamil Nadu Power and Infrastructure Finance safe?

Are the fixed deposits of Tamil Nadu Power and Infrastructure Finance safe?

With attractive interest rates that go as high as 8.77%, the deposits of TN Power Finance Corporation is not a bad bet. Bank interest rates are around that 5.5% mark which is not attractive at all. Inflation is hovering around those levels, so the real rate of returns have been dismal. Given that the deposits of Tamil Nadu Power Finance and Infrastructure is fully owned by the government of Tamil Nadu, they are also safe.

For senior citizens who have been hit hard by low interest rates, these deposits could be a good bet. For non senior citizens too the deposits offer the best interest rates when compared to banks. We also believe that interest rates on fixed deposits would not go higher anytime soon and hence these deposits offer an attractive option for investors.



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Buy The Stock Of This Logistics Player For Long-Term, Says Motilal Oswal

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Upside target of Rs 390 on the stock

TCI is India’s leading integrated multimodal logistics and supply chain solutions provider. The company has infrastructure comprising an extensive network of 1400+ company owned offices, 12 million sq. ft. of warehousing space, a strong team of 6000+ trained employees and a strong foundation.

“The unique multimodal capabilities of TCI would drive consistent growth in volumes and earnings across segments over the next few years. With the easing of fuel prices (on account of tax cuts), margins are expected to remain at elevated levels,” Motilal Oswal Financial Services has said in its report.

TCI: A strong player with a solid portfolio

TCI: A strong player with a solid portfolio

TCI has a well-blended portfolio, with a presence across the high-volume freight segment and value-added segments such as Integrated Supply Chain Solutions. The company also has niche high-margins segments such as Seaways.

Travel corporation of India is among the very few players that provide end-to-end logistic solutions with multimodal capabilities across road freight, rail, and coastal shipping.

“We expect Travel Corporation of India to clock a revenue/EBITDA/PAT CAGR of 17%/25%/33% over FY21-24. We reiterate our Buy rating, with revised target price of Rs 790 per share (16x FY24E EPS),” the brokerage has said.

Valuation and view on the TCI stock

Valuation and view on the TCI stock

Motilal Oswal Financials expects the growth momentum to continue with the pickup in economic activity and the normalization of transportation activity. The government reforms leading to formalization and market share gains for organized players such as TCI would help, the brokerage has noted.

“We expect TCI to clock a revenue/EBITDA/PAT CAGR of 17%/25%/33% over FY21-24E. The stock trades at 14x FY24 EPS. We maintain our Buy rating, with revised target price of Rs 790 per share (16x FY24E Earnings Per Share),” the brokerage has said.

The shares of Travel Corporation of India were last seen trading at Rs 708.50 on the NSE.



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Bank unions call for two-day nationwide bank strike on Dec 16-17

Banking & Finance

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The United Forum of Bank Unions (UFBU) has given a two-day nationwide strike call for banks on December 16-17 in opposition to the proposed privatisation of two public sector banks (PSBs).

“We have served Strike notice to both the IBA and the government,” CH Venkatachalam, General Secretary of All India Bank Employees Association (AIBEA) told BusinessLine.

The government is widely expected to introduce a Bill — the Banking Laws (amendment) Bill — in the Parliament’s ongoing winter session to pave the way for the privatisation of two public sector banks.

This Bill is yet to officially get Cabinet approval but sources say that this may have been discussed at today’s Cabinet meeting.

Also see: Just debate: Opposition needs to re-establish House scrutiny by debating laws, and not disrupting proceedings

UFBU, a representative body of nine bank unions, has been opposed to government’s privatisation attempts. In February this year — soon after the government announced in the Budget that two banks will be privatised — the UFBU gave a strike call for March 15–16, a success going by the expanded participation of bank employees and officers.

The UFBU, which met on November 29-30, has decided to unleash agitations including dharna in all State capitals up to December 4.

“On the day of the introduction of the Bill, there will be a demonstration/morcha before the Parliament,” said Venkatachalam. A Twitter campaign is planned for December 10. UFBU also plans to submit an online petition to the Prime Minister on December 14.

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