Ideas for Profit

Ideas For Profit | Rossari Biotech: Exceptional earnings growth, capacity headroom and inorganic strategy

While we see Rossari Biotech as a worthy stock with exceptional earnings growth rates, capacity headroom and product launches for the long term, we believe investors can wait for market gyrations to accumulate this stock at lower levels. Here’s why.

Ideas For Profit | HDFC Bank’s earnings growth moderates in Q1; Is the golden era over?

HDFC Bank’s valuation has fallen to multi-year lows, while long-term growth and profitability outlook are still very strong. It is rare to find a high quality business with predictable earnings growth at compelling valuations. Investors should utilise the current weakness in stock price as an opportunity to buy.

Ideas For Profit | Tatva Chintan Pharma Chem: Is the IPO worth applying?

Indian speciality chemicals market is expected to almost double over the next five years, outpacing the overall chemical market. In this context, the IPO of Tatva Chintan Pharma Chem comes at an opportune time for investors.

Betting on Infosys’ strong earnings trajectory, narrowing gap with TCS

Strong broad-based revenue acceleration, operational efficiencies, decent deal win and healthy deal pipeline provided the management with the confidence to up the full year revenue guidance. However, the red hot labour market and shortage of skills in high demand suppressed margins, increased attrition and sub-contracting costs, and will continue to remain a headwind for margins.

Ideas For Profit | Mindtree is a long-term winner, add the stock on every decline

Mindtree continues to justify its run up in share prices by delivering strong results, and Q1 FY22 was no different. Superlative revenue, record deal win and strong outlook for the future were the highlights of its earnings report. Record hiring showed management’s confidence in demand while trying to adeptly manage the supply side crunch. We see a strong earnings trajectory ahead. Hence, albeit the optically expensive valuation, existing investors should hold the stock and new investors look to add on every decline.

Ideas For Profit | This auto ancillary stock deserves a place in long-term portfolio

On the back of strong product portfolio, Wabco enjoys a leadership position in its market segments. The stock of Wabco is trading at a valuation of 41.9 times FY23 projected earnings – 10% lower than its long-term average of 46 times. We advise investors to buy the stock in a staggered manner. Here’s why.

Ideas For Profit | Avenue Supermarts: Earnings growth cycle to kick-off post COVID

D-Mart is amongst the fastest growing retailers with a track record of robust 40 percent earnings (pre-pandemic) over the last eight to 10 years, and the only listed play in the grocery retail segment. At current price, the stock is trading at 86x its FY23 projected earnings and EV/EBIDTA of 56x its FY23 projections. Higher valuations would sustain given the resumption of strong earnings growth. We advise investors to add the stock to the portfolio.

Ideas For Profit | TCS: A soft quarter does not take away the long-term investment case

TCS reported a soft quarter after three consecutive quarters of strength, impacted principally by the pandemic-led disruption in India. Despite the revenue miss, management remains confident of strong double-digit growth given its order book and pipeline and the fact that India business is a deferment of revenue, and not a loss. The company is alluding to a multi-year technology cycle with the pandemic being a catalyst to facilitate large scale migration to cloud platform which incidentally is also paving the way for reduction in carbon footprint. We see strong tailwind for this technology bellwether that should translate into steady predictable earnings growth.

IRCTC: What’s the stock really worth?

While vengeance travel post COVID is likely to benefit all travel and tourism players, the reason for investors to on-board this train for the long haul is its unique offering. IRCTC is a combination of three to four priced businesses under one umbrella with an opportunity for value unlocking; not to forget the new vistas opening up for the company in exciting growth areas.

GR Infraprojects IPO: sector tailwinds, strong execution record & margin profile to drive rerating

Favourable sector tailwinds, proven execution track record and better margin profile owing to integrated business model bode well for GR Infraprojects. This along with valuation discount to peers makes a perfect recipe for re-rating. Hence, we recommend investors to subscribe to the issue.

Bharat Dynamics: Valuation factors in worries; stock looks attractive

Bharat Dynamics has seen a good uptick in order inflows, and its working capital intensity has dropped. Cash flows from the business are improving. The stock has fallen from a high of Rs 480 apiece in August last year to around Rs 369. The positives: the valuation factors in the worries and the stock is currently trading 11 times its FY23 estimated earnings, which makes it look attractive.

Ujjivan SFB: Has COVID second wave dealt a body blow?

The second wave of COVID wave has forced a long period of lockdowns across states in India. Due to this, most borrowers are incapable of repaying the loan thus taking a toll on Ujjivan SFB’s asset quality. But can the investors still look for the stock? Is it still safe for risk-takers? Watch this edition of Ideas For Profit to find out

Bajaj Healthcare offers good stock upside potential on strong business prospects, execution

Bajaj Healthcare has been able to scale up business operations despite the fragmented nature of the industry and competitive market dynamics. Investors can look to accumulate the stock on dips as the business prospects appear promising, the management is executing well, and the stock offers decent upside potential over the long term.

Ideas For Profit | Subros: Proxy play on cars and CV demand recovery

The fortunes of Subros are directly linked to the growth of the passenger vehicle industry. Though the first quarter of FY22 is expected to be impacted by the second wave of COVID, the outlook for the remaining fiscal seems encouraging. The company management has indicated that the demand is expected to pick up post-easing of lockdown restrictions in various states. At the current valuation of 17.9 times FY23 projected earnings, the stock looks attractive.

Ideas For Profit | Repco Home Finance tripled from Jun’20 lows, will its rally continue?

Despite the spectacular rally with its stock price rising from Rs 120 in June last year to Rs 375 currently, there is more room for strong upside given the attractive valuation. Among different asset classes catered to by NBFCs, home loans have the least credit cost and are less risky. Hence Repco generating ROE above 15 percent should command higher valuation.

Robust project pipeline, earnings visibility support Power Grid’s valuation & stock

The stock of Power Grid is trading at 8 times earnings and 1.5 times estimated book value of FY23, which we believe is reasonable in the light of improving earnings outlook, opening up of new opportunities in the sector, easing of payment issues with State Electricity Boards and a 6% dividend yield.

Ideas For Profit | IFGL Refractories: Is this proxy play on steel cycle worth investing?

IFGL is a proxy play for the increased production of steel, likely to be seen in FY22 and FY23. Investors can accumulate this stock and add on decline. We had also recommended IFGL back in April 2021. We expect revenue growth of 10 percent and 12 percent respectively for FY21 and FY22. IFGL is trading at a P/E multiple of 14x/11x FY22E and FY23E respectively.

Ideas For Profit | BEL: Robust order book, dominant position in defence sector to aid stock upside

Strong earnings visibility led by robust order book, encouraging financial performance supported by good execution and improving cash flows indicate that BEL’s stock could continue to reward shareholders, particularly in the long run considering its dominant position in the growing defence space.

Ideas For Profit: NTPC in sweet spot as earnings improve, valuation remains attractive

Post pandemic, NTPC has emerged even stronger with improving earnings visibility, balance sheet and cash flows. Here’s why we believe the stock offers a good risk-reward ratio.

Ideas For Profit: IndiaMART Intermesh: Valuation offers further stock upside, invest for long-term

IndiaMART Intermesh’s March quarter results were in line with market expectations. Long-term accelerated adoption of internet by MSMEs, dominant market share in the B2B online space, debt-free balance sheet and upfront collection of revenues from subscribers are the key factors driving out optimism. The business is promising and inorganic growth is worth watching out for. We feel the valuation offers an upside for the investors. We recommend investors to buy Indiamart at current levels and add on decline from a long-term perspective.

Ideas For Profit | Is it time to add tyre stocks to your core portfolio?

Tyre manufacturers — CEAT, Apollo Tyres and MRF — are seeing a stellar ride on the back of a sharp pick-up in demand from OEMs and the replacement segment. Q4 FY21 numbers corroborate the strong pick-up in demand. At the current market price, valuations of these companies look attractive given the demand outlook. Here’s why you should include them in your core portfolio.

Ideas For Profit | Why a niche player like GNA Axles is a must-have stock in your long-term portfolio

As part of the discovery series, Moneycontrol Pro had identified GNA Axles as one of the ideas that can be a part of a long-term portfolio. The stock price has run up 46% since then as compared to 20% rise in Midcap index. And the surge in price has been corroborated by the strong financial performance for Q4FY21.

GNA Axles — A niche player with a strong brand and healthy financials

The surge in GNA’s stock price has been corroborated by the strong financial performance for the quarter ended March 2021. The company posted a strong growth in its top line, and there is a substantial improvement in its margin profile as well.

Ideas For Profit | What makes Amara Raja & Exide good long-term investment bets

Battery manufacturers Amara Raja Battery and Exide Industries remained resilient during the first wave of COVID-19, and are expected to stay strong during the second wave as well, given the strong replacement demand. Demand concerns due to the COVID-19 second wave have led to corrections in the stock prices of these companies (Amara Raja’s stock price is down 24% from a 52-week high, while Exide’s is down 12% from its 52-week high). We believe that this soft patch provides a good entry point with a long-term view.