Stocks in the news
Sayaji Hotels: Subsidiary Sayaji Hotels Management (SHML) has signed and entered into 7 management agreement for the expansion of SHML by having new properties in Andhra Pradesh, Gujrat, Uttarakhand, Rajasthan and Maharashtra.
Aarti Drugs: Subsidiary Aarti Speciality Chemicals stands out to be one of the beneficiaries of the Government of India's recently approved Production Linked Incentive scheme for the pharmaceutical sector.
NMDC: The company has fixed prices of iron ore - lump ore (65.5 percent, 6-40mm) at Rs 5,100 per tonne and fines (64 percent, -10mm) at Rs 4,210 per tonne - w.e.f. March 6.
PNC Infratech: CARE revised the company's PNC Delhi Industrialinfra's credit rating on long-term bank facilities to A- from BBB+, with stable outlook.
Tata Chemicals: ICICI Prudential Mutual Fund lowered its shareholding in the company to 3.05 percent from 3.37 percent via open market transactions.
India Grid Trust: The company signed a share purchase agreement to acquire NER-II Transmission, from Sterlite Power as part of the Framework Agreement. The indicative value of the acquisition is around Rs 4,625 crore and would boost IndiGrid's AUM by 34 percent to over around Rs 20,000 crore ($2.8 billion)
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Price @ Call: 702.55
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Aarti Drugs - Q4 FY20 (Audited –Cons)
Total income from operations at 449.6 Cr
459.1 Cr (-2.11%) YoY | 473.5 Cr (-5.07%) QoQ
Year ending revenue: 1,806 Cr Vs. 1,560 Cr (15.71%)
Net Profit of 58.8 Cr
27.4 Cr (114.61%) YoY 27.7 Cr (114.92%) QoQ
Year ending Net profit: 141.4 Cr Vs. 89.7 Cr (58.43%)
EPS (in Rs.) 25.26
12.06 YoY | 11.92 QoQ
Year ending EPS: 60.57 Vs. 38.48
View: Result is in line with the expectation. Although topline decreased but bottom line improved significantly in this quarter. Further net profit also includes profit on sale of assets of Rs 8.37 Cr.
Business Updates & Highlights:
EBITDA in Q4FY20 is around INR 72.1 Cr Vs. 57.1 Cr in Q4FY19 therefore up by 26.3% in YoY. EBITDA in FY20 is around 263.3 Cr Vs. 209.6 Cr in FY19. Operating profit margin is also stable in QoQ.
ROE and ROCE is around INR 19% and 28.2% respectively and book value per share is around INR 239 and share is currently trading at 3.6x of its book value. Company is currently trading at annualized PE of around 14.5 which is very fair as per industry benchmark. Promoter holding is around 61.4% in the company which is very good. FIIs and mutual fund hold around 1.07% and 4.19% in the company. Cash and cash equivalent as of March 2020 in operating activities is around INR 250.7 Cr. Liquidity position is slightly better in this quarter but still its high and debtor realization is around 3.5 months.
Share View: Share price high 880 (52 week) and now 860. Share is almost doubled in 1.5 months in march 20 share was trading around 480. Aarti Drugs Ltd is one of the leading pharmaceutical manufacturers in India. The company is engaged manufacturing of pharmaceuticals. ADL operates in the anti-diarrhea, anti-inflammatory and anti-biotic therapeutic segments. The Company is engaged in the manufacturing of Active Pharmaceutical Ingredients (APIs), Pharma Intermediates, Specialty Chemicals and also produces Formulations with its wholly-owned subsidiary – Pinnacle Life Science Private Limited.
Position: Share support price is INR 820/775. Mid/Long term investor should continue with the company with target price of INR 980
Opportunities: The Company is also in the process of acquiring an ISO 9002 compliance for all its units and one of the units has already been approved. Company has been able to carve a niche for itself and is looking forward to expand the volumes. Consumer spending on medicines is expected to increase, which will spur growth in the generic sector in the domestic market.
Risk: Share price trading at all time high any good correction in near future in the market can correct the share price eg. March when Nifty traded below 8000 and share was trading around 480.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.
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Ahead of Market: 10 things that will decide D-St action on Friday
Nifty50 made strong gains and closed near the psychological mark of 17,800 level. After a gap-up start, the index ended up forming a small bullish candle with a long lower wick, suggesting intraday selling was bought into. Analysts said a follow-up buying might help gauge the strength of the up move.
Ahead of Market: 10 things that will decide stock action on Monday
Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said the short term trend of Nifty is range bound with volatility and the consolidation movement is expected to continue for the next week. “We expect Nifty to trade in a range of 17,800-17,300 levels by next week. Any decisive breakout on either side is likely to accelerate momentum in the market.”
Commerce ministry for imposing anti-dumping duty on Chinese ofloxacin medicine
Ofloxacin is used to treat certain infections including bronchitis, pneumonia and infection of skin, bladder, urinary tract and prostate. DGTR had conducted the probe following a complaint from Aarti Drugs Ltd about the dumping and initiation of the investigation. The directorate works under the ministry.
Ahead of Market: 10 things that will decide D-Street action on Thursday
Osho Krishan, Sr Analyst - Technical & Derivative Research, Angel One, said the unilateral movement of the index has placed it towards the psychological mark of 18,000, which might hinder the ongoing up move, followed by the weekly swing high of 18,100-18,150 odd levels that might act as a sturdy wall for the bulls.
Balaji Speciality Chemicals manufactures niche chemicals such as ethylene diamine, piperazine anhydrous, diethylenetriamine, aminoethyl ethanolamine and aminoethyl piperazine, using the monoethanol amine process.