Dalelorenzo's GDI Blog
14Apr/210

8 smallcaps where MFs hiked stakes in Q4. Worth investing?

NEW DELHI: Mutual funds bought dozens of smallcap and midcap inventories during the March quarter. Among them, at least eight inventories interpreted MF holding go up by over 100 basis details, March quarter shareholding data available so far suggests.Analysts have been positive on many of these stocks of late. Among them, Mayur Uniquoters understood MF holding rise by 222 basis points to 3.6 per cent of cases at the end of March quarter from 1.38 per cent at the end of December. The stock is up 34 per cent so far in 2021. Sharekhan is expecting the company to report a 40 per cent YoY rise in March quarter profit."The busines is expected to see robust revenue emergence at 40 per cent YoY at Rs 183.30 crore, aided by a recuperation in automotive and non-automotive firms. On a QoQ basis, revenues are projected to improve by 8 per cent of cases. Ebitda boundaries are likely to decline by 35 basis moments YoY at 24.5 per cent, ” the brokerage said. It has a price target of Rs 500 on the stock. It sold at Rs 399 apiece on Tuesday.In Amrutanjan Health Care, MF stake rose by 206 basis drawn attention to 7.34 per cent of cases from 5.28 per cent. This scrip gaining access to 14 per cent so far this calendar. It transactions at a P/ E of 24.7 occasions FY22 EPS. Ashika Stock Broking has a' buy’ rating on the stocks with a price target of Rs 670. The scrip mentioned at Rs 614 apiece on Tuesday.“Despite volatility in key textiles( menthol and vital lubricants ), blatant margins of the company haven’t gone below 56 per cent in the last decade and with diversification in other businesses, this would support much stability ahead. Moreover, the company is consistent with dividend playing with an average payout rate of 25 per cent for the last five years, " Ashika said. 8204416 6Indoco Redress has delivered flat returns for 2021 so far, but MFs have raised their stake in the conglomerate by 205 basis points to 18.74 per cent from 16.69 per cent sequentially. Anand Rathi expects Indoco to report a 308 per cent YoY rise in fourth fourth net profit at Rs 21.9 crore from Rs 5.4 crore in the year-ago quarter. Margins are encountered expanding 429 basis drawn attention to 16.5 per cent of cases while auctions are projected to rise 19.5 per cent to Rs 325 crore.In Capacite's Infraprojects, MF comprising stands at 11.45 per cent at the end of March quarter, up 189 basis details over 9.56 per cent of cases at the end of December. Prabhudas Lilladher said Capacite's revenues might have risen 27.6 per cent of cases for the fourth, as the company watched a sharp-witted getaway in operations, especially in CIDCO and other major private sector jobs. "We expect Ebitda margin to improve 100 bps YoY to 16.5 per cent due to operating leveraging kicking in. Execution rampup in CIDCO project, inauguration of MHADA, healthy OB from private sector organizations and an overall upcycle in the real estate sector would drive strong accomplishment in the coming parts, " the brokerage said. It has suggested a price target of Rs 270 on the stock.In the case of Ahluwalia Contracts( India ), MF accommodating has gone up to 26.11 per cent of cases from 24.48 per cent of cases, up 163 basis levels sequentially. Centrum Broking said executing are caught up for the company led by strong order backlog and improved labour availability. That said, its perimeters for the part may remain under pressure due to lower efficiency and likely clauses towards sure-fire bequest projects.Safari Industries, Bharat Dynamics and Granules India are among other companies where domestic store residences hiked ventures by over 100 basis extents during the quarter gone by. Commentators are positive on Bharat Dynamics and Granules India. JM Financial projects its rate target for Bharat Dynamics at Rs 150 based on 16 times FY23 EPS. "We derive comfort on a healthy order backlog of Rs 53,000 crore( 4 experiences TTM auctions ), strong degree pipeline and rampup non-defence incomes( smart-alecky municipal, medical rig) and service income. Any changes to the cost plus boundary organization on chosen requires may be a positive trigger, ” JM Financial said.In the case of vehicles of Granules India, Q4 profit is discover ripening 39 per cent mainly due to operating leverage and a lower tax rate.Revenue for this firm is seen flourishing 27 per cent of cases to Rs 760 crore, with Ebitda margin projected to expand 625 bps to 23 per cent.Overall, out of 431 companionships reporting March quarter shareholding patterns so far, 44 verified a rise in MF braces, 62 understood a drop in fund exposure, while there was no change in shareholdings in the remain.

Read more: economictimes.indiatimes.com

14Apr/210

Electrode price rise brightens outlook for HEG

ET Intelligence Group: HEG and Graphite India, top electrode makes in the world, are expected to benefit from a sharp rise in the electrode costs due to tight supply in China. The electrodes are used for steel production. In the previous sword rally, the two stocks gained around 20 -3 0 terms within two years. With clean product gaining significance, especially in China, steel business are rapidly changing their capabilities from blast furnace to electric arc furnace( EAF ), which requires electrodes. This augurs well for the two listed Indian manufacturers.After a lacklustre veer in 2020, electrode costs have gained 10 -1 5% in the past two weeks. Electrodes are used in the EAF method of sword product which is less polluting than the conventional blast furnace method. China’s commitment to lower its carbon emissions has led to shutting down of blast furnace abilities amid rising prominence of EAF. Graphtech, the world’s largest graphite electrode producer, said in the latest earnings call that it expected premiums to shoot up crisply in the latter half of 2021. EAF currently organizes practically 15% of the full amounts of the global sword production. During the previous sword cycles/second between 2015 and 2018, the average electrode price rose by more than 10 meters while even further it has less than halved from the peak.The two Indian companies posted loss in the first nine months of FY2 1 due to lower average realization, lower creation and stock-take write off. But, they pictured a consistent sequential rise in the operating perimeter due to improving ability utilization.In the March quarter, specialists expect 5-10% decline in revenues of the two companies. But, they are likely to report net profits compared with losses a year ago. In addition, with improved outlook for the sector, FY22 is expected to be better than the previous fiscal year.At the heyday of the previous round, HEG and Graphite India had reported net profit of Rs 3,050 crore and Rs 3,500 crore. For FY22, advisers expect profits of Rs 900 crore and Rs 1050 crore in that order.Over the past month, the stocks of HEG and Graphite India has been achieved in 25% and 12% respectively. At Monday’s closing of Rs 2,045.6 for HEG and Rs 583.5 for Graphite India, the one-year forward price-earnings variou works out to be nine and 11 respectively.Each of the companies is obligation free. With greater earnings visibility opened conglomerate premiums and higher sword necessitate, they are expected to report a turnaround in fiscals in this fiscal.

Read more: economictimes.indiatimes.com

5Apr/210

Apollo, Blackstone to put in final bids for Luminous

Blackstone and Apollo Global Management, two of the world’s biggest buyout monies, are set to submit binding offers to buy Luminous Power Technology from French group Schneider Electric on Tuesday, the guaranteed deadline, people aware of the developments said.Schneider is selling Luminous, a make of inverters and industrial batteries that it acquired ten years ago, as one of the purposes of a world-wide portfolio realignment to depart non-core, consumer-centric transactions. The divestment of Luminous comes in the face of rising usage of lithium-ion artilleries and a reduced need for inverters as superpower availability improves in the country. 8164340 7The modifying business worlds might further chill the [?] 3,500 -4, 000 -crore valuation aimed, some analysts and buyers said. ET was the first to report on November 25 Schneider’s plan to sell the business. It had acquired 74% of the business for [?] 1,400 crore from the New Delhi-based SAR Group and had mandated Citi last year to find a buyer.ET too reported in its January 25 edition that three funds had been shortlisted to buy Luminous. Earlier, potential suitors had included Tata Group company Voltas and Hyderabad-based Amara Raja Battery and even Bain Capital. Most of them opted out, though some belief Bain Capital might still make a last-minute attempt. Blackstone and Luminous representatives declined to comment. Spokespeople for Apollo, Bain and Citi did not respond to emailed queries.Luminous renders guide acid-based industrial artilleries and oversight matters 30% of the [?] 7,500 crore ($ 1 billion) artillery inverter sell in India, rivalling with Exide Industry and Microtek , amongst other. What got the funds interested in the company was its fulcrum towards consumer electricals and appliances.Last month, it started fixing energy-efficient supporters, targeting [?] 500 crore in income from the overall followers category by 2023 and a 5% market share within two years. The busines said it expects 15% of its revenue from ceiling devotees be derived from the energy-saving category.The company has seven manufacturing legions, more than 28 sales offices in India and a proximity in over 36 countries, with more than 60,000 channel partners. Shining affixed a profit of [?] 141 crore on receipt of [?] 3,642 crore in FY20.

Read more: economictimes.indiatimes.com

7Mar/210

6 turnaround stocks worth betting on

While a few areas like IT, pharmaceuticals and telecom , among others, expanded during the Covid-1 9 generated lockdowns, most other sectors "re not" so lucky. However, reform and opening up of the economy has helped these to make a comeback and the third quarter numbers of several companionships are proof of that. “The aggregate third-quarter crowds were good because the recovery in many sectors were much better than the street hopes, ” says Sonam Udasi, Senior Fund Manager, Tata Mutual Fund.Experts feel that this positive trend will continue in the coming parts and the lower locate in 2021 -- the y-o-y growth will inspect exaggerated--is just one of the factors. “Profitability in the fourth quarter will be better because the economy would have opened up more during the January-March period. Due to increased auctions, traders are now ready to hold inventory and this is working in favour of creators in 2021 -2 2. Improvement in stock expenditures should help companies from that segment, ” says Kishor P. Ostwal, Chairman and MD, CNI Research.The faster recovery in impacted areas has been translated into various of these turning around in the third quarter. For example, infrastructure actors are benefitting due to increased government spending. Real estate players, particularly those with business in Maharashtra, are also witnessing increased marketings on the back of stamp duty reduction. There is pick up in automobile ancillaries because of the pick up in automobile marketings. While Covid related corporations benefitted earlier, other healthcare providers are catching up now. Some business from areas like textiles, jewelleries, etc are also in the turnaround list.Are these turnarounds really a blip or will these be sustainable in the coming quarters as well? Professionals continue to be positive on the construction space. “The construction space is expected to do well due to increased government spending in 2021 -2 2. Reduction of pay by some of these companies is another positive factor, ” says Udasi. Continued foreign inflow of stores, especially through Reits and InvITs, is the main factor that is helping some of these companies to reduce debt. Reduction in corporate tariff is helping companies to report increased revenues and some of them are using this higher profit to pay off debt and this, in turn, will increase profit in coming quarters by reducing interest expenses. While turnaround is good, some of the bars have already reacted to this news and share tolls have already gone up. Therefore, the next step is to make sure that this is not yet fully priced in. For that, we compared the current prices of stocks with the consensus target toll and shortlisted only the ones that have sufficient potential upside. The following firms are sorted on the basis of potential upsides. 8112206 6RaymondRaymond was able to report a consolidated net profit of Rs 21.7 crore during the third quarter, is comparable to a net loss of Rs 133 crore during the second quarter. More importantly, all business segments have shown signs of improvement in the third quarter and have reported positive earnings before interest, imposition, depreciation and amortisation( Ebitda ). For example, its branded textile business has already reached 70% of pre-covid positions. Stamp duty reduction by the Maharashtra government has come as a boon for participates like Raymond, which entered the real estate business recently. This helped Raymond to propel two more towers in its Thane project and garner 179 brand-new reserves during the third quarter. ! function () "use strict"; window.addEventListener( "message" ,( purpose( a ) if( vacant 0 !== a.data[ "datawrapper-height" ]) for( var e in a.data[ "datawrapper-height" ]) document.querySelector( "iframe[ src *= '"+ e+ "'] " ); t &&( t.style.height= a.data[ "datawrapper-height" ][ e ]+ "px" )))(); Stringent cost reduction measures adopted by Raymond during the turmoil helped it to improve margins. The reduction in working net capital cycle has helped Raymond to reduce its net pay as well. Commentators believe that things will improve further during the coming parts. “We expect Raymond to improve its overall monetary health aided by recovery in auctions and perimeters. Its receipt is gradually recovering to the pre-covid heights and further improvement will be translated into higher perimeters owing to operational leverage, ” says a recent LKP Research report.JMC Projects( India) JMC Projects was able to report third-quarter income raise of 15% y-o-y and 32% q-o-q and its quarterly incomes hit a brand-new top. JMC was also able to bag prescribes value Rs 1,050 crore in the third quarter. “The order book of JMC Programme is around 4.3 meters its last-place 12 month incomes. If one lends the prescribes received after the third quarter and L1 positions, receipt possible jumps to 4.8 eras and this appeases the concerns seeing sustainable growth in the medium term and beyond, ” says a recent Anand Rathi report. ! gathering () "use strict"; window.addEventListener( "message" ,( function( a ) if( vacant 0 !== a.data[ "datawrapper-height" ]) for( var e in a.data[ "datawrapper-height" ])))(); JMC, the subsidiary of Kalpataru Power, was also able to get back to light-green in the third quarter of 2020 -2 1, after remaining in the red in the previous three districts. The obligation reduction exercising continues and JMC has increased its consolidated net obligation from to Rs 1,530 crore in December from Rs 1,672 crore in September, principally because of client receipts and tightening the working capital cycle further. The government’s efforts to attract more foreign inflows into infrastructure through InvITs should help companies like JMC and any success on this front will support its monetisation efforts and improve cash flows.IRB Infrastructure DevelopersIRB Infrastructure Developers is another company from the road space that has offset smart-alecky convalescence during the third quarter and hit the street’s possibilities. Improvement in toll accumulations -- up by 32% q-o-q -- due to increased road traffic after the unlocking of the economy and jump in EPC executions--up by 42% q-o-q--because of normalisation of labour and supply bonds helped IRB to achieve this feat. ! capacity () "use strict"; window.addEventListener( "message" ,( gathering( a ) if( vacant 0 !== a.data[ "datawrapper-height" ]) for( var e in a.data[ "datawrapper-height" ]) document.querySelector( "iframe[ src *= '"+ e+ "'] " ); t &&( t.style.height= a.data[ "datawrapper-height" ][ e ]+ "px" )))(); For speciman, the Mumbai-Pune expressway toll collection pranced by 42% q-o-q during the third quarter and spanned the previous heyday collect achieved during the third quarter of 2019-20. IRB’s third part net profit of Rs 69.48 crore was able to wipe out the losses of two previous quarters--of Rs 19.66 crore and Rs 30.14 crore respectively. Despite this stellar rendition, IRB is still quality reasonably. “In the third quarter, IRB beat our revenue and net profit reckons by 15% and 37% respectively. We maintain buy on IRB, given attractive valuation and comfy liquidity posture, ” says a recent HDFC Sec report. ITD Cementation IndiaITD Cementation was able to bounce back faster due to its prevailing outlook in the metropolitan infra infinite and MNC parentage. For instance, its third quarter revenue grew by 12% y-oy and 43% q-o-q. It also surprised at the market net profit level because of higher profits from its seam bet campaigns. For speciman, it was able to report a consolidated net profit of Rs 30 crore in the third quarter, is comparable to a net loss of Rs 49.75 crore during the second quarter and Rs 10.60 crore earning during the third quarter of 2019-20. ! run () "use strict"; window.addEventListener( "message" ,( function( a ) if( void 0 !== a.data[ "datawrapper-height" ]) for( var e in a.data[ "datawrapper-height" ]) document.querySelector( "iframe[ src *= '"+ e+ "'] " ); t &&( t.style.height= a.data[ "datawrapper-height" ][ e ]+ "px" )))(); ITD is expected to report better outcomes in coming years. “We expect execution momentum of ITD Cementation to remain strong going ahead due to health and diversified line-up record, robust bid grapevine and overall strong infra push in the economy, ” says a Prabhudas Lilladher report. ITD’s large order book, targeted above Rs 12,000 crore and around 4.8 hours its historic incomes, yields clear visibility in coming years. ITD also has strong execution capabilities and was able to solve the setbacks in Kolkata and Bangalore metro projections. It can also boast of a strong balance sheet and low-pitched leveraging. Its pay rate is exclusively 0.5 times.Aditya Birla Fashion& RetailAditya Birla Fashion& Retail's third-quarter receipts went down by 20% y-o-y, but recovery was discernible compared to the second quarter -- up by more than 100%, triggered principally by wed and gala season necessitates. The management’s focus on cost control and lower discount facilitated AB Fashion to keep its gross margins at these levels. ! run () "use strict"; window.addEventListener( "message" ,( operate( a ) if( vacant 0 !== a.data[ "datawrapper-height" ]) for( var e in a.data[ "datawrapper-height" ]) var t =d ocument.getElementById( "datawrapper-chart-"+ e )))(); Its indebtednes reduction approach -- through asset dose and more efficient working capital management, is also yielding fruit. For speciman, this indebtednes reduction has helped AB Fashion to bring down its finance payment by 28% q-o-q in the third quarter and should help AB Fashion to bring it down further in coming years. “Controlled working capital cycle, convalescence in profitability and steady free cash flow contemporary would result in debt/ Ebitda fraction waning to 0.6 periods by 2022 -2 3 is comparable to six eras in 2019 -2 0, ” says a recent ICICI Direct report.Narayana HrudayalayaWhile Covid meant added revenues for some segments of the pharmaceutical industry, it was negative for hospices, especially those that were concentrating on other ailments. Nonetheless, they are catching up now and coming back to colors. For speciman, Narayana Hrudayalaya was able to report a net profit of Rs 40.8 crore during the third quarter, is comparable to a loss of Rs 3.42 crore during the second quarter and net profit of Rs 31.38 crore reported during the third quarter of last year. Substantial improvement in operational performance, despite Covid-related challenges, helped Narayana to achieve this feat. To keep its balance sheet health, Narayana is following the' asset right model’. ! affair () "use strict"; window.addEventListener( "message" ,( operate( a ) if( vacant 0 !== a.data[ "datawrapper-height" ]) for( var e in a.data[ "datawrapper-height" ]) document.querySelector( "iframe[ src *= '"+ e+ "'] " ); t &&( t.style.height= a.data[ "datawrapper-height" ][ e ]+ "px" )))(); While Narayana owns some hospitals, others are partnerships -- Narayana only takes care of hospital management, medical rig, etc and the investments in land, construct, etc are done by partners. “Due to Narayana Hrudayalaya’s focus on balance sheet and likely improvement in average realisation per operating bed by optimising speciman assortment, we expect an improvement in return on capital filled( ROCE) to 16.9% in 2022 -2 3 from 11% in 2019 -2 0”, says a recent ICICI Direct report.Note: Price and target price as on 16 Feb. Source: ETIG Database and Bloomberg( Graphics by Sadhana Saxena/ ET Prime)

Read more: economictimes.indiatimes.com