*MONEY TIME TALKS*
*23 January 2022*
• *Tata Elxsi* Q3 PAT jumped 43% to Rs. 151 cr. on 33.18% higher revenue of Rs 635.41 cr. It is expected to have any equally strong Q4. The share may be added.
• J P Morgan is still bullish on *Tata Steel, SAIL, Hindalco*, and *NMDC* given their attractive risk-reward ratio and consensus earnings upgrade for the sector. Add these scrips.
• The Budget may give big impetus to ethanol-making sugar
• mills. *Balrampur Chini, EID Parry, Dalmia Bharat Sugars, and Shree Renuka Sugars* ought to be added.
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• Saudi Arabia wants to team up with global companies to become a leading producer of Zinc Alloys. Buy *Vedanta*.
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• The Watch list of a veteran market man for this week includes *Anantraj, Dai-Ichi Karkaria, Denis Chem Lab, Deepak Spinners, Fluidomat, RCF, Renuka Sugars, TGVSL & Ruchira Papers*.
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• *Paytm* plans to shut its Canada app to focus on the Indian business. The Company continues to remain in a loss. Avoid.
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• The Union Budget is expected give big impetus to infrastructure companies. Buy *Dilip Buildcon*.
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• *HCL Tech* posted the highest Q3 revenue jump in 12 years. The sequential 7.6% dollar revenue growth beat even its peers. Add.
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• *Indian Oil* has bagged 9 City gas distribution licences and will spend Rs. 7000 cr. in developing the infrastructure in these areas. Good long-term prospects. A good buy at current rates.
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• *Metro Brands* posted a good Q3 and FY22 results may more than double FY21 figures. Its Rs. 5 FV share quotes around Rs. 605 but there is room for appreciation. Add.
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• *UPL Corp*., an arm of *UPL*, has raised $ 700 mn debt from Global brands to repay a costlier loan availed to acquire Arista Life Science in 2019. Buy.
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• *DCM Shriram’s* Q3 PAT spurts 38% to Rs 350 cr. despite 26% decline in revenue. The company has recently entered into the Drones business. Add.
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• *JSW Energy* posted a strong Q3 with 162.23% higher PAT of Rs 323.93 cr. on 18% higher net sales of Rs. 1894 cr. Accumulate as the Company envisages capex of around Rs 10000 cr. every year for the next 10 years.
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• *HFCL* has won the Indian Navy contract for the supply and deployment of fully indigenous, highly secure, Layer 2 networking switches. Add.
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• *Oil India* has sold its 9 year old stake in a US shale asset for $25mn and utilize the money for its operations. A positive for the Company.
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• *Shakti Pumps* posted a subdued Q3 as profit declined by about 40% in view of the stiff competition. Sell at current prices and enter again lower prices.
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• Although *Ultratech* posted results below market expectations, most analysts are optimistic about it as the infrastructure sector expects a big boost in the upcoming budget. The lower prices may be a good opportunity to add.
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• *Reliance acquires* 54% stake in Robotic startup Addverb Tech and ventures into the Sodium-ion batteries and other futuristic businesses. Add.
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• *Rajratan Global Wire* continues to post good results. The Q3 EPS was Rs. 32.27 v/s Rs. 14.50 in Q3 FY21. This seems to be a big place to grow. Add.
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• *Bank of Maharashtra* is gradually improving. Its Q3 EPS of Re 0.48 was more than double of Q3 FY21 EPS of Re. 0.23. The share is a divestment candidate and its BV of Rs.16+ is very near to the CMP. Add with a long term perspective.
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• IT firm *Mphasis* posted a 9.8% higher Q3 NP at Rs. 357.6 cr. and expects to end FY22 on a much better note.
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• *Asian Paints*’ Q3 NP fell sharply by 18% on higher input prices, although consolidated revenue grew by 26% to Rs. 8527 cr. It would be advisable to sell now and buy later.
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• *Dhunseri Tea* is a progressive, quality-focused tea producer for over 50 years. It acquired Balijan North Tea Estate from Warren Tea and notched Q2 EPS of Rs 25.5 and H1 EPS of 50.2 as against FY21 EPS of Rs 40 on its equity of Rs 10.5 cr., which could lead to FY22 EPS of Rs 52. The share is trading at a forward P/E of just 6x. Add for 35% gain.
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• *Jindal Steel & Power* has 10 MMTPA iron making and 5,049 MW power generating capacity at an investment of $12 billion across the globe. It plans to expand capacity by 85% by FY25 and has notched Q2 EPS of Rs 25.3 against (-) Rs 7.6 YoY and 418% higher H1 EPS of Rs 50.3, which may lead to FY22 EPS of Rs 110+ on its equity of Rs 102 cr. A reasonable P/E of 7x could take its share price to Rs 770.
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*IFB Agro Industries* manufacturer of single grain pure country liquor, Extra Neutral Alcohol (ENA), 6 bottling plants and a captive power plant has notched 27% higher Q2 EPS of Rs 22.6 and 150% higher H1 EPS of Rs 39.9, which could take its FY22 EPS to Rs 80+ on its small equity of Rs 9.4 cr. The share, which made a lifetime high of Rs 939 on 26 Dec 2017, could fetch a gain of 40%. Buy.
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• *Dhunseri Ventures*, the largest maker of PET bottles and Polyester chips etc. has notched 14% higher Q2 EPS of Rs 16.8 and 203% higher H1 EPS of Rs 44.5, which could lead to FY22 EPS of over Rs 90 against FY21 consolidated EPS of Rs 66.3. It is setting up a 45,000 TPA film packaging plant has the potential to fetch a 40% gain. Buy.
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• Heavy investment buying is seen *Manaksia Ltd*., producer ofsponge iron, steel products and aluminium rolled products used as enclosures, bus bodies, flooring and general engineering purposes. It notched 46% higher Q2 EPS of Rs 5.1 and 89% higher H1 EPS of Rs 9.8, which could take FY22 EPS to Rs18 against FY21 EPS of Rs 8.2. The share may appreciate by about 30%. Buy.
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*Him Teknoforge*, manufacturer of quality forgings and machined components to top Automobiles, E-Vehicle OEMs, Railways, Defence, Aftermarket and Exports is undervalued as it has notched 43% higher Q2 EPS of Rs 4 and H1 EPS of Rs 7.7 against minus Rs 2.3 YoY and FY21 EPS of Rs 6.5, which could take FY22 EPS to Rs 17+. The share could cross the Rs 170 mark. Buy.
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*Venus Remedies* manufactures analgesic, antipyretic, anti-diabetic, antibiotic, cardiac, disinfectant & antiseptic, neurology, oncology, respiratory, steroid, hand sanitizer, skincare, stress, urology and vitamins and exports to 70 countries. It has notched 63% higher Q2 EPS of Rs 17.3 and H1 EPS of Rs 26.4, which may lead to FY22 EPS of Rs 60 as against Rs 50 in FY21. VRL will become debt-free soon. Buy for decent gain.
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*Bank of India* having over 5108 branches\5551 ATMs and present in 18 countries and NNPA of 2.8% only with CASA of 39.5% has clocked 65% higher Q2 EPS of Rs 2.8 and 19% higher H1 EPS of Rs 5, which may lead to FY22 EPS of Rs 12 in FY22 against Rs 6.4 in FY21.. The share is poised to advance by over 30%. Buy.
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*Sree Rayalaseema Hypo Strength* into organic and inorganic chemicals used in textiles, leather, paper, sugar, sanitation, non-steroid anti-inflammatory drugs, pesticides and general hygiene etc. has posted 28% higher Q2 EPS of Rs 12 and 31% higher H1 EPS of Rs 22.6, which may take FY22 EPS to Rs 46+ against Rs 35.3 in FY21. A P/E 10x could take the share price to Rs 460. Buy.
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Investment buying is seen in 60 year old* Hindustan Tin Works* and a leading manufacturer and exporter of high-performance cans, printed sheets and related components to consumer marketing companies in India and abroad has notched Q2 EPS of Rs 4.4 and H1 EPS of Rs 9.3, which could lead to FY22 EPS of over Rs 20 against Rs 14.4 in FY21. Buy for 40% gain.
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*Glenmark Life Sciences* makes API generics for chronic therapeutic areas of cardiovascular disease, central nervous system disease, pain management and diabetes, is undergoing heavy expansion having successful research in molecules and 7 oncology products in the $14-billion global oncology market has notched 46% higher Q2 EPS of Rs 9.8 and 35% higher H1 EPS of Rs 19.2, which could take FY22 EPS to Rs 45 against FY21 EPS of Rs 32.6. Buy for 30% gain.
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Sugar Industry to benefit from the Budget proposals with Ethanol blending incentives. *Vishwaraj Sugar Industries* plans to hike Ethanol capacity from 100,000 to 500,000 litres per day. Investors can hope for 40 % returns from this stock.
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• *Vinyl Chemicals* promoted by Pidilite Ltd. declared an excellent Q3 on Friday with income up 25% and profit more than trebled with an EPS of Rs.5.80. The stock trades cheap at Rs.293 and can rise by 50% within a year.
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• *Gokuldas Exports* stock hit an all-time high of Rs.410 on the back of excellent Q3 numbers on Friday. *Kitex Garments* in the same line of business all-time high is Rs.800 but currently trades at Rs.245. Buy for 100 % appreciation from the current level.
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• With developed countries declaring the third Covid-19 wave as ‘Flu’, there should see good resurgence of travel to the UK and Europe. *Thomas Cook* is a big player in the European market. Keep the stock on your radar.
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• With govt. doling out subsidy to households for installation of solar rooftop panels, *Visaka Industries* should see good days going ahead. It is the only listed manufacturer of Solar rooftop panels.
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• *Coastal Corporation* is an undiscovered stock with a distillery for manufacturing ethanol. The stock has seen good upgrades by brokerages. Incred Equities projects a target price of Rs.1850 while CMP is only Rs.470! A potential multi-bagger? A clear case of risk & reward.
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• *Tejas Networks*, now owned by Tata Sons, posted poor results were due to semiconductor shortages. However, its order book stands tall close to Rs.1000 cr. It also inducted COO of TCS and the CEO & MD of Tata Communications on its board. A dark horse indeed.
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• NSE listed *Sundaram Finance Holdings* holds about 10% in Sundaram Clayton valued at Rs.1000 cr. and stakes in other auto ancillaries like Wheels India, Brakes India, Mind Srl Italy, IMPAL, Axles India and other TVS group companies. At Rs.82, the stock trades cheap and can double from the current levels. Radhakishan Damani owned Brighstar Invesments holds nearly 2% stake in it.
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• *Genesys International*, a 3D mapping co., recommended many times here hit a new 52 week high of Rs.469 last week. Ace investor, Ashish Kacholia, has acquired nearly 2% stake. The co. has also recruited Ravi Chopra from Amazon as Vice President.
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• With crude oil above the $80 mark, the use of ethanol in fuel will get another boost and Sugar stocks will be in the limelight. *Shree Renuka Sugars* has the highest ethanol capacity of 1400 KLPD. Keep this stock on your radar till crude prices trade above the $80 mark. Another trigger is the IPO of Adani Wilmar, as Wilmar is the promoter of Shree Renuka now.
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• Some IT results hide more than they reveal. *Cyient, Datamatics & Mastek*….one has to dive deep to unearth value.
• *Goldiam Intl* and *Renaissance Global* should come out with excellent Q3 results.
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• Thangamayil, the South based jewellery chain is extremely well-managed and appears a good buy.
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• *Kalyani Steels* caters to the automotive industry, rolled bars for engineering applications etc. Stock trades at an attractive PE of 6x. Its capacity expansion is also on. It may deliver 50% return in 1 year.
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• *SAIL* is India’s largest Steel maker with 5 integrated and 3 special plants. Its modernization and expansion is in the final stage and it has cut its debt from Rs 54000 cr. to Rs 25000 cr. in the last 2 years. Stock trades at a PE of just 3x and can gain 50% returns in 1 year.
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• *Renaissance Global*, global leader in branded jewellery, has announced a licensing agreement with the National Football League. FIIs have hiked their stake by 4% in it and analysts expect bumper Q3 results.
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• *BCL Industries* is a diversified into Edible Oil, Vanaspati, Distillery and Real Estate. At 700 KLPD, it is one of the largest producer of Ethanol from grains that will help it perform at high growth. Analyst expects strong returns and this stock can be a dark horse.
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• *Ajmera Realty & Infra* is developing the next phase of its 100 acre Wadala residential project. With an estimated sales value of Rs 1500 cr., the project comprises 540 residential flats and 18 retail shops. The stock is available at an attractive valuation and is a good long-term bet.
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• *Globalspace Technologies* owns Mediapp, a digital distribution platform that links Chemists, Stockists and Pharma companies. Its platform Docexa is India’s first artificial intelligence & machine learning enabled virtual clinic platform that connects doctors with patients and will be a game changer for its stock and give one side movement like Sastasundar Ventures.
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• *Rain Industries*, largest producer of calcined petroleum coke is also into cement, tar distillation & specialty chemicals in 8 countries. It is negotiating to refinance its bonds prematurely that may lead to reduced interest cost from CY22 onwards. It can be multi-bagger of FY23 with rising product prices.
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• *Shree Renuka Sugars* is the largest Ethanol manufacturer in India with 7 sugar mills, 4 distilleries, 2 refineries and 6 power plants. It is investing about Rs.650 cr. to expand its Ethanol capacity from 720 to 1400 KLPD. Its 100% subsidiary, KBK, is similar to PRAJ and Ethanol expansion implies more business to KBK. Focus on Renuka for multi-bagger returns in the medium to long term.
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• *Fluidomat* is a cash rich, dividend paying niche player manufacturing couplings used by leading industries. It paid 32.5% dividend for FY21 and boasts of huge reserves of Rs.32.26 cr. on its small equity of Rs.4.92 cr. Ace investor, Sunil Jain, holds 2.73%, Chhayalata Patni holds 2.24% & Shashank Khade holds 1.64%. Its H1 net profit up by 29%. Buy for quick 30-40% gain.
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• *Banswara Syntex* posted 1486% higher Q2 profit of Rs.11.74 cr. v/s only Rs.74 lakh in Q2FY21. It has huge reserves of Rs.340.25 cr. against its equity of Rs.17.12 cr. Indus Kamdhenu fund holds 3.51%. Buy for 30% gain.