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HDFC Balanced Advantage Fund

The HDFC Balanced Advantage Fund had assets under management at Rs 41972.08 crore. As of August 31, 2021, the fund’s expense ratio for the Regular plan was 1.62 percent.

“For units in excess of 15% of the investment, 1% will be levied for redemption within one year,” according to the HDFC Balanced Advantage Fund’s Exit Load. The needed minimum investment is Rs 5000, with an extra investment of Rs 1000. SIP investments start at Rs 500. The fund has a 4-star rating from the CRISIL rating agency.

The fund is invested in Indian stocks to the tune of 67.51 percent, with 47.83 percent in large-cap stocks, 9.87 percent in mid-cap stocks, and 8.15 percent in small-cap stocks. The fund has a debt investment of 19.23%, with 8.9% in government securities and 10.33% in funds invested in very low-risk securities.

HDFC Balanced Advantage Fund Direct Plan has a 1-year growth rate of 64.46 percent. It has had an average yearly return of 15.04 percent since its inception. National Thermal Power Corp. Ltd., Coal India Ltd., ICICI Bank Ltd., Power Finance Corpn. Ltd., and ITC Ltd. are the fund’s top five holdings.

HDFC Equity Savings Fund-Growth

The scheme invests in stock and equity-related securities, arbitrage opportunities, and debt and money market instruments in order to provide capital appreciation.

The fund’s expense ratio is 2.14 percent, which is greater than the expense ratios charged by most other Equity Savings funds. The fund now has a 66.45% stock allocation and a 29.16 percent debt allocation. HDFC Equity Savings Fund has a 1-year growth rate of 30.87 percent. It has returned an average of 9.69 percent per year since its inception. The financial, energy, healthcare, technology, and metals sectors make up the majority of the fund’s equity holdings. The fund has a 4star rating from Value Research.

HDFC Hybrid Debt Fund

The HDFC Hybrid Debt Fund-Growth manages a total of 2,661 crores in assets (AUM). The fund’s expense ratio is 1.87 percent, which is higher than the expense ratios charged by most other Conservative Hybrid funds. The fund now has a 24.47 percent equity allocation and a 67.37 percent debt allocation.

HDFC Hybrid Debt Fund’s 1-year growth returns are 23.27 percent. It has had an average yearly return of 10.57 percent since its inception.

The financial, energy, construction, healthcare, and technology sectors make up the majority of the fund’s equity holdings. The program invests largely in debt securities, money market instruments, and a moderate amount of stocks in order to create income and capital appreciation. The fund has 4star rating from Value Research.

HDFC Multi Asset Fund

The Direct-Growth manages assets worth Rs 1,186 crores (AUM). The fund has a 0.93 percent cost ratio, which is higher than most other Multi-Asset Allocation funds. The fund currently has a 66.35 percent stock allocation and a 16.06 percent debt allocation.

The 1-year returns for HDFC Multi-Asset Fund Direct-Growth are 32.83 percent. It has returned an average of 11.80 percent per year since its inception.

HDFC Gold Exchange Traded Fund, Infosys Ltd., HDFC Bank Ltd., ICICI Bank Ltd., and HDFC Bank Ltd. are the fund’s top five holdings. The Scheme invests in a diversified portfolio of equities and equity-related assets, debt and money market instruments, and gold in order to provide long-term capital appreciation and income.

Disclaimer

Please note investing in mutual funds is subject to market risks and one needs to be cautious at this point of time as markets have gone-up sharply. Neither the author, nor Greynium Information Technologies Pvt Ltd would be responsible for losses incurred based on a decision made.

Infosys

HDFC Securities sees an upside on the stock of Infosys from the current market price of Rs 1,709 The firm has set a target price of Rs 1,995 on the stock.

“We maintain BUY on Infosys (INFY), following the beat on both revenue and margin and a strong growth outlook. Revenue growth guidance for FY22E was increased to 16.5-17.5% CC (14-16% earlier) and the EBIT margin band was maintained at 22-24% (despite the near-term supply crunch),” the brokerage has said.

Infosys- Growth engine revving up

Outlook

According to brokerage, for FY22/23/24E, we’ve assumed USD revenue growth of 18.5/13.8/10.1 percent, with Q3FY22 at 4% QoQ. For FY22/23/24E, the EBIT margin is expected to be 23.4/23.2/23.5 percent. The stock is valued at 25.1x FY24E (an 8% discount to TCS), with an EPS CAGR of 13.9 percent for FY21-24E. With >13 percent EPS CAGR and >40 percent RoIC, we remain positive on INFY (top choice in tier-1 IT), valuing the business at INR 1,995 based on 30x Dec-23E EPS.

Q2FY22 highlights

1) INFY reported revenue growth of +6.3% on a quarter-over-quarter and year-over-year basis. Digital revenue increased by 10% quarter over quarter in USD terms, but core revenue remained constant.

(2) EBIT margin fell 12 basis points QoQ to 23.6 percent, owing to salary increases, higher subcontracting and hiring costs, which were somewhat offset by improved utilisation (+100 basis points QoQ) and a favourable foreign exchange rate.

(3) Attrition has risen to 20.1 percent and is expected to remain high.

(4) In Q2, five of the 22 significant agreements won were in the BFSI/ENU sector, three in retail and manufacturing, and three apiece in communication/hi-tech. There were fifteen agreements in the United States, six in Europe, and one in the Rest of the World.

Wipro

HDFC Securities sees an upside on the stock of Wipro from the current market price of Rs 673. The firm has set a target price of Rs 690 on the stock.

Wipro had a solid revenue performance in the second quarter, with organic growth of 4.6 percent QoQ (following +4.8 percent) exceeding guidance and expectations. Wipro’s growth engine has been resurrected, and its organic growth for FY22E (16 percent YoY) has been aligned with that of larger peers. The deal pipeline is still strong, with a fair mix of significant transactions.

Wipro : Continued growth momentum

“We increase our revenue estimate for FY22/23E by +1.4/2.5% to factor in better growth visibility. Our target price of INR 690 is based on 24x Dec-23E EPS (~20% discount to INFY). The stock is trading at 27/22.4x FY23/24E EPS. Maintain ADD”, the brokerage said.

Outlook

According to brokerage, For FY22/23E, factored in +27.6/+12.8 percent USD sales growth, implying a 3 percent CQGR in Q2-Q4FY22. For FY22/23E, the IT services EBIT margin is estimated to be 18.2/18.5 percent, resulting in an EPS CAGR of 15.1 percent over FY21-24E.

Q2FY22 highlights

(1) Revenue growth of 6.9% QoQ (estimated +5.5%) was above the guided range;

(2) EBIT margin for IT services was 17.8% (-126 bps QoQ, estimate of 18.5%), impacted by two months of wage increases for senior executives and rising attrition;

(3) BFSI/communication/consumer/technology verticals led growth;

(4) Offshoring stood at 55.6 percent.

HCL Technologies

HDFC Securities sees an upside on the stock of HCL Technologies from the current market price of Rs 1251. The firm has set a target price of Rs1,450 on the stock.

“We maintain BUY on HCL Tech (HCLT), supported by strong growth in services (+5.2% QoQ CC) and healthy deal wins. The miss in P&P (-8% QoQ) is a one-off, from which it should recover in Q3,” the brokerae has said.

HCL Technologies: Deal wins to boost growth

Q2FY21 highlights

(1) HCLT’s revenue growth of 3.5 percent QoQ CC was little lower than our expectations.

(2) The IT&BS segment increased +5.2 percent QoQ CC (driven by app modernisation and cloud transformation), ER&D grew +5.4 percent QoQ CC (driven by digital engineering), and goods & platform grew -8 percent QoQ CC (due to deal postponement).

(3) Manufacturing and biological sciences led vertical growth, offsetting flat growth in financial services and retail and consumer packaged goods.

(4) HCLT announced a new TCV of USD 2.25 billion, consisting of thirteen significant services deals and one product win.

Outlook

According to brokerage, for FY22/23/24E, we’ve assumed USD revenue growth of +12.2/13.3/11.5 percent, IT&BS growth of +15/14/12 percent, ER&D growth of +12/13/12 percent, and P&P growth of +0/6/7 percent. Over the same time, EBIT margins are expected to be 19.4/20.5/20.7 percent, equating to an EPS CAGR of 14 percent (TCS/INFY/WPRO at 14/14/15 percent CAGR). With a 5% FCF yield and a 25% RoIC, the valuation is reasonable at 18x FY24E.

Cyient

HDFC Securities sees an upside on the stock of Cyient from the current market price of Rs 1160. The firm has set a target price of Rs1,330 on the stock.

“We increase our EPS estimate by +5.8/6.3% for FY23/24E, based on an expected recovery in core business and margin beat. Our target price stands at INR 1,330, based on 22x Dec-23E EPS. The stock is trading at 21.2/18.7x FY23/24E, a discount of ~50% to LTTS. Maintain BUY,” the brokerage has said.

Cyient – Improving growth vectors

Outlook

For FY22/23/24E, we’ve assumed +11.7/+15.5/+13.6 percent USD revenue growth, with FY22E implying +10.5/+17.8% growth in services/DLM.

Q2FY22 highlight

(1) USD revenue increased 4.6 percent QoQ versus 3.9 percent expected; core services/DLM revenue increased 4.9/5.7 percent QoQ;

(2) services EBIT margin improved 90bps QoQ to 15.5 percent, boosted by operational efficiency and revenue mix, partially offset by wage hike and higher SG&A;

(3) additional impact of merit increase will c

(4) DLM margin was 6.8%, up 99 basis points from the previous quarter;

(5) the company secured six significant orders totaling USD 63.5 million in TCV, four of which were in services and one in DLM.

Disclaimer

The above stocks to buy are picked from the report of HDFC Securities. Please note investing in stocks is subject to market risks and one needs to be cautious at this point of time as markets have gone-up sharply. Neither the author, nor Greynium Information Technologies Pvt Ltd would be responsible for losses incurred based on a decision made.

What are ESG focused companies?

ESG companies are typically those which play a role in nature’s nurturing as well as development. Also, the criterion is critical as it also focuses to what extent the company is transparent in its disclosures as well as management policies and practices. There is an aim to become profitable but not impacting or minimizing the environment at the least.

For several reasons and initiatives, the companies have been included into the space and likewise a number of other profitable entities can lose their importance in a case they are low on their ESG scores and hence may not see capital coming in.

ESG scoring by CRISIL

For different sectors, CRISIl- the rating agency comes up with ESG scores. The ESG scores are based on information available in public domain, including from third-party providers, Crisil said. “The scores are based on Crisil’s proprietary framework and is assigned on a scale of 1-100, with 100 denoting best-in-class ESG performance. The current evaluation analyses three annual reporting cycles through fiscal 2020,” the rating agency said, adding it was a first-of-its-kind study in India.

Top performing ESG stocks

Of the stocks, ranking high on the ESG score by CRISIL, here we provide how such companies’ have performed and even outperformed ever since the pandemic has struck the global world.

Key companies’ that can be called as the ESG stocks are Infosys, Tech Mahindra, Mindtree, Wipro, L&T Infotech. These are all from the IT space. The next sector on the list commanding the highest score is the financial space. Among financial institutions, Kotak Mahindra Bank had the highest ESG score, followed by HDFC Bank, IndusInd Bank, Axis Bank and ICICI Bank. Other integral PSU companies with the top score include SBI, Canara Bank and REC.

Other stocks from the space include Marico, Ambuja Cements, Godrej Consumer, P&G, Ultratech Cement, Asian Paints, HUL, PI Industries, Eicher Motors and Page Industries among others.

ESG stock	1-year return
Havells India	115%
JK Cement	133%
Solar Industries	145%
Titan	111%
L&T	101%
Adani Transmission	483%
Adani Power	210%
Tata Power	321%

Disclaimer:

ESG companies’ are all those companies which give thrust to social, environmental and governance issues and will be the future if not currently the reason for investment by retail investor class. Nevertheless, the information is collated just for informational use only.

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