Ideas For Profit | IDBI Bank: Divestment to drive stock upside?
IDBI bank is all set for sale with Cabinet Committee on Economic Affairs giving its in-principle approval for strategic disinvestment and transfer of management control. The board of LIC has also passed a resolution to the same effect. Both, LIC and the government, plan to sell all or part of their stake in the lender. Undoubtedly, privatisation would unlock value of IDBI’s deposit franchise. With the bank’s market cap to deposits ratio at just 18% compared to over 30% for small to mid-sized private banks, there is possibility of further upside in valuation.
Ideas For Profit | Is Sona BLW Precision Forgings’ IPO worth betting on?
After a two-month hiatus, a compelling IPO from Sona BLW Precision Forgings has opened for subscription from today. The issue size at the upper end of the price band (of Rs 285 - Rs 291) is Rs 5,550 crore, of which Rs 300 crore is fresh issue. The remaining Rs 5,250 crore is an offer-for-sale from Blackstone Private Equity. Though the IPO has been priced at elevated levels, we advise investors to subscribe for long-term, given the massive growth opportunities and stellar operating performance.
Sona BLW Precision Forgings: Is this expensive IPO worth betting on?
Though the IPO has been priced at elevated levels, we advise investors to subscribe for the long term, given the massive growth opportunities and Sona BLW's stellar operating performance
Ideas For Profit | Bata India: Is the footwear stock poised for a strong comeback?
Bata India posted better-than -expected March quarter results with revenues close to pre-COVID levels driven by significant ease of restrictions and opening up of offices post dip in COVID-19 cases. Bata’s stock is trading at 46x its FY23 projected earnings. It’s down 13 percent from the pre-COVID levels witnessed in February 2020. Karunya Rao tells us why investors should add the stock to the portfolio.
Ideas For Profit | Minda Corp: Why this auto ancillary stock is still a favourite
Minda Corporation posted a stellar set of numbers for the final quarter of FY21. A sharp recovery in demand post COVID-related lockdown for PVs and two-wheelers, increase in content per vehicle due to BS VI and growth driven by new focus areas make us upbeat about the prospects of the company. Moreover, the company’s strong order book and the robust product portfolio add to our confidence. The stock is currently trading at an attractive valuation of 15.3 times FY23 projected earnings. Karunya Rao tells us why investors can bet on this stock for the long haul.
Minda Corp: Why this auto ancillary firm continues to remain a favourite
Minda Corp's strong order book and robust product portfolio add to our confidence. At the current valuation of 15.3 times FY23 projected earnings, the stock looks attractive
Ideas For Profit | NOCIL: End of capex cycle ups free cash flow prospects
NOCIL is expected to maintain dominant presence in the Indian market due to its technological leadership, client relationships and government’s focus on import substitution. Also, due to supply chain disruptions and reduced preference for China because of geopolitical reasons, it is emerging as a reliable rubber chemical supplier for tyre companies. Investors should note that company has no incremental plan for capex and will focus on increasing utilisation levels in the coming years. The end of this capex cycle should translate to free cash flow generation in the near-to-medium term.
Ideas For Profit | Can PNB Housing’s stock surge fuel rally in other housing finance companies?
PNB Housing Finance stock has doubled in 6 days after the company’s board approved the preferential issue of equity shares and warrants to private equity firm the Carlyle group along with other investors. Moreover, the news of Aditya Puri, the former CEO of HDFC bank, set to join the lender’s board, is being lauded by the Street. The dazzling rise in stock price has pushed up the valuation to a level which is now pricing in many positives. Investors should be cautious as any potential upside in PNB housing looks limited following the fierce rally, and rather scout for other opportunities in the housing finance sector. Karunya Rao gets a lowdown of some of the low valued quality HFC stocks that could catch-up in terms of valuations.
Ideas For Profit | Nazara Technologies: Promising investment bet for long-term
Rakesh Jhunjhunwala-backed Nazara Technologies ended FY21 on a strong note. The gaming company seems to have a high valuation based on historical parameters, but the company looks attractive both from a macro and micro perspective. Valuations are undeniably expensive, but investors should view the business in the context of its addressable market size and long term structural industry tailwinds. The business presents long-term investors (with at least 5 years’ time horizon) an attractive opportunity to invest in a company with strong prospects.
Ideas For Profit | Are AC companies a cool investment bet?
Low penetration levels coupled with rising temperatures make a compelling case for long-term investment in the AC sector. Near-term visibility on demand front is limited, but the companies in the sector have sufficient liquidity to withstand the demand disruptions caused by Covid. Overall, valuations in the sector appear quite stretched, they seem to factor in long-term positives.
Ideas For Profit | Motherson Sumi: Strong Q4 results, accumulate stock on dips
Karunya Rao decodes why Motherson Sumi is still an attractive bet to buy on dips, the company’s growth outlook for global and domestic markets and what are the key risks to watch out for.
Ideas For Profit | ITC: What's holding the stock back despite cheap valuation?
In Q4, ITC saw recovery in almost all segments. However, with the second wave of Covid, we expect some impact on the performance of cigarettes, discretionary FMCG portfolio as well as hotels and paper divisions. Better traction in health, hygiene and essential food portfolio could offset some of the decline. Post Covid, we expect segments like Hotel, paper and packaging to witness growth with healthy profitability. Going forward, the concern remains whether ITC will be able to maintain and increase its market share in the cigarette business in the face of competition and cheaper imports. Based on the FY22E and FY23E earnings, ITC is trading at a P/E multiple of 17x and 16x, respectively. Despite its huge discount to the FMCG universe, ethical considerations have prompted some long-only investors to avoid ITC. For domestic retail investors the valuation coupled with healthy payouts are big draws.
Ideas For Profit | Dixon Technologies: Opportunity in consumer durables market to fuel stock upside
Dixon Technologies has been riding the industry tailwinds for the past several quarters. Driven by favorable consumer backdrop, the company delivered another earnings beat in the final quarter of FY21. Given the disruptions caused by the second wave, Dixon’s business has come to a near-standstill over the course of April and May. However, the management is upbeat on a sharp demand recovery in the next couple of months. With momentum on its side, the stock could see further upside on the back of a large untapped opportunity in the consumer durables market.
Ideas For Profit | Divi’s Labs: Superior earnings visibility & balance sheet quality, buy stock on dips
Divi’s Labs delivered a strong March quarter, helped by broad-based growth. Margin expansion can be attributed to lower raw material cost and operating leverage. We believe a strong opportunity awaits in Contrast Media APIs and Nutraceuticals businesses. Near-term growth is likely to pick up as the company starts utilizing new assets
Ideas For Profit | Cadila: COVID opportunity, complex pharma pipeline offer strong risk reward
Cadila’s stock was primed by a series of potential roll outs to meet the COVID-19 challenge. Beyond COVID, the company is steadily building up its injectable and biosimilars portfolio - the areas to look at for the longer term.
Ideas For Profit | CAMS priced at premium to mutual fund stocks; should you buy?
CAMS enjoys a very strong position in the mutual funds industry. The sheer volume handled by CAMS more than off-sets the weakness on pricing front justifying its premium valuation. After the recent rally, CAMS is trading at rich valuation of 43 times FY23 estimated earnings. Watch this video to find out if you should add this stock to your portfolio.
Ideas For Profit | Goldiam International: Strong results, shiny outlook, attractive valuations
Goldiam International’s business outlook is bright given the strong outlook for the US economy, focus on e-commerce business and fast growing lab diamond business. With COVID second wave impacting the Indian economy, companies with overseas exposure are expected to perform relatively better. Since our recommendation in the Discovery series a month back, Goldiam stock is up 23% which is significantly better than benchmark Nifty gain of 5%.
Ideas For Profit | Shakti Pumps - Our winning idea; can the stock rally more?
The stock of Shakti Pumps recently made a high of Rs 784/share, recording gains of almost 175% in around five months. Operational recovery and strong growth in earnings supported by orders from the government backed the stock surge. In this edition of Ideas for Profit, Moneycontrol’s Karunya Rao analyses the stock valuation, earnings key triggers and opportunities for growth
Ideas For Profit | SBI: Stellar asset quality at FY21 end; Can the stock rally more?
The stock more than doubled after lifting of the lockdown in June last year. Will the stock repeat the performance on peaking of the second wave? Watch this video to find out.
Ideas For Profit | Mas Financial: Valuation down to IPO level, time to add?
FY21 was a difficult year for Mas Financial. Amid the challenging macros, the risk-averse lender went shy on expanding its books, leading to a decline in AUM. But despite setbacks, balance sheet quality has improved, the company has manageable NPAs, excess provision, adequate capital and liquidity.
Ideas for profit | Aarti Industries: Buy with investment horizon of 3-5 years
Investors should watch out for market-wide gyrations to accumulate Aarti Industries’ stock. Given the elevated multiples, accumulation should be done with an investment horizon of three-five years. We believe such a vesting period is warranted to harness the diversified chemical behemoth’s foray into downstream value-add products and the optionality of value unlocking in pharma space.
Ideas For Profit | Bharti Airtel: Subscriber addition, jump in data usage aid Q4
Bharti Airtel reported a third consecutive quarter of record customer additions in India at the end of the March quarter. Significant jump in data usage translated to better ARPU for the African market as well. We advise investors to accumulate the stock with a long term view.
Ideas for Profit | Well capitalised, cheaply valued bank for long haul
Federal Bank saw a good quarter with no hiccups on asset quality. Moderate restructuring lends comfort, with retail-focused book and stable deposit franchise being key positives for margin trajectory.
Ideas for profit | Dr Reddy’s: COVID opportunity key growth lever
Dr Reddy’s strong product pipeline is suitably supported by R&D & capex budget. In FY22, product launch momentum is expected to remain strong. Another emerging growth lever for DRL are China, India & Europe opportunities. Given emerging earnings catalysts, Dr Reddy’s remains an accumulation opportunity on declines.
