MONEY TIMES TALK
21 August 2022
• *Godrej Industries* has bounced back into the black after a few stressed red quarters. Its Q1 EPS was Rs. 1.73 and it deserves a rerating. Add.
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• *Surya Roshni’s* Q1 was below expectation. But given its large customer base, reliability and quality products, continue to hold.
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• Battery recycler, *Gravita* has big expansion plans after an excellent Q1. The share may rise 50% this year. Add.
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• *IRCON International* has posted excellent results. With its impressive order book position, its share has over 60 % return potential in the medium term from the current low levels. Buy.
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• *Reliance Infra’s* dues of Rs. 900 cr. from DVC is now with the Calcutta High Court, which it will soon receive and use it to clear its debts. Other big payments are also in the pipeline. A great future awaits this Co. Add at every opportunity.
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• Recent investor presentations by *YES Bank* point to a bright time ahead. Patient investors will gain if they enter now. A good buy.
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• *Praj Industries* has completed an ethanol biorefinery for IOC. Similar plants are planned for HPCL and BPCL. Buy for long term.
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• *ONGC* has inked a pact with Exxon Mobil for deepwater exploration in the KG-Cauvery basin in the East and Kutch-Mumbai in the West. Add.
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• *Blue Star’s* excellent Q1 with 87% rise in revenue to Rs. 1970 cr. and PAT jumping 2.9 times to Rs. 100.9 cr. The Co. is on track to post a superb FY23. Buy.
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• Revival in the auto sector has boosts revenue of *Kirloskar Ferrous*. The company is also going in forward with integration. A safe share for the next few quarters. Add.
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• Mid-cap steel cos. witnessed a rebound in revenues. Buy *GPIL* with a horizon of one year for a 50% likely gain.
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• Despite inflationary pressures, *Page Industries* posted better than expected results. Co. has decided to ramp up production on the back of rising demand. Add in small quantities.
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• *MHRIL (Mahindra Holidays)* is adding vacation destinations in the face of heavy bookings. The rising share volumes and stock prices seem to back this information. Add in small quantities.
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• *Balrampur Chini*, a low-cost integrated sugar mill, is poised to benefit from higher ethanol blending. Hold this share for 3 years for big profits.
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• Zinc prices set to rise as Europe’s largest smelters from Trafigura Group halt production due to gas shortage. *Hindustan Zinc and Vedanta* must be added.
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• Credit card spending has grown remarkably in the last few months. Buy *SBI Cards* for substantial gains.
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• *IDBI* stake sale is quite near with Carlyle, Fairfax and other PE funds in the fray. A nice short-term opportunity to make money. Risk-bearing investors may enter.
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• Due to price caps, oil marketing cos. had to borrow 17% more in the last few months. Stay away from *BPCL and HPCL* for some time till there’s some clarity on this.
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• *Cadila Pharma* is in the race to buy Sharon Bio-med. If it succeeds, it will be one more feather on its cap. Add.
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• *M&M’s* sourcing deal with Volkswagen will help speed up its EV rollout. A good long-term bet.
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• Money Times was the first to recommend *BCG (Brighcom Group)* around Rs. 14. Since then, it declared a bonus and touched a high of Rs. 200 within a year. Its Q1 is also good as revenue rose 127% and PAT by 162%. Add this zero-debt co. for gains.
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• *Bajaj Electricals* excellent Q1 with 58% higher revenue, EBIT rising 874%, and EPS of Rs. 3.50 v/s a negative EPS of Rs. 2.18 YOY. Add for long term.
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• *Sree Rayalaseema Hypo Strength* manufactures organic and inorganic chemicals with 10MW power plant and 11.25 MW of wind power. It posted 98% higher Q1EPS of Rs 20.9 against Rs 59.9 in FY22, which may lead to FY23 EPS of Rs 95. A reasonable P\E of 12x could take its share price to Rs 1140. Buy.
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• *Nile Ltd*., secondary manufacturer of Pure Lead and Lead Alloys, has notched a 27% higher Q1 EPS of Rs 21.5 as against Rs 79.2 in FY22. This may take FY23 EPS to Rs 90. This share, which touched an all-time high of Rs 1164 on 07 Nov 2017, is set to touch Rs 720 at a P\E multiple of 8x.
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• *Universal Starch-Chem* is into the starch business, liquid glucose and dextrose products catering to Food, Pharmaceutical, Textile, Paper & Adhesive industries. It notched 38% higher Q1 EPS of Rs 4 against FY22 EPS of Rs 27.2. Since its H2 is always better, FY23 EPS may touch Rs 32. Buy.
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• *Indian Metals & Ferro Alloys* posted 35% higher Q1 EPS of Rs 24.8 as against FY22EPS of Rs 92.7 on strong operational performance and good market conditions. Its FY23 EPS may rise Rs 105 at a P\E of 2.7x. Accumulate for 30% gain.
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• *NLC India, formerly Neyveli Lignite* is a PSU mining lignite and generating power through lignite-based thermal power plants is expanding. It notched Q1 EPS of Rs 3.7 as against Rs 6.7 in FY22, which may lead to FY23 EPS of Rs 16+. Buy for 30% gain.
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• *Repco Home Finance* with 155 branches and 24 satellite centers has posted 127% higher Q1 EPS of Rs 11.8, which may enhance FY23 EPS to Rs 50 as against Rs 31 in FY22. A conservative P/E of 5x can take the share price to Rs 250 in the medium term. Buy.
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• *Indian Hume Pipe* with 12 pipe manufacturing plants undertakes water supply, sewerage and drainage projects on a turnkey basis and has also developed concrete railway sleepers. It posted 344% higher Q1 EPS of Rs 4.3, which may take FY23 EPS to Rs 20. Buy for 30% gain.
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• *IFB Agro Industries* with 6 captive bottling plants manufactures single grain made Indian Liquor, Extra Neutral Alcohol and has captive power plant. It notched Q1 EPS of Rs 15.7 against FY22 EPS of Rs 62.5, which could take FY23 EPS to Rs 70+. 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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• *Shreyans Industries* manufactures writing & printing paper and has a 12MW captive power plant. It notched Q1 EPS of Rs 6, which could take FY23 EPS to about Rs 20. Buy for 30% gain.
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• *Karur Vysya Bank* with 789 branches and 145 business outlets has notched 110% higher Q1 EPS of Rs 2.9 (FV Rs 2), which may take FY23 EPS to Rs 12.5 from FY22 EPS of Rs 8.4. Buy.
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• *Sportking India*, which exports 45% of its sales to 30 countries, has posted 135% higher Q1 EPS of Rs 62.5, which may lead to FY23 EPS of Rs 310+ against FY22 EPS of Rs 308. Buy this undervalued stock for 25% gain.
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• *Canara Bank* with 9734 branches and 10817 ATMs has clocked 69% higher Q1 EPS of Rs 12 as against FY22 EPS of Rs 32.5. A likely EPS of Rs 50 in FY23 could take its share price to Rs 350 at a P/E of 7x.
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• *Meghmani Organics*, manufacturer of pigments & agrochemicals, is undergoing expansion of Rs 710 cr. in Pigments and in Titanium Dioxide. It posted 59% higher Q1 EPS of Rs 4.3 as against Rs 12 in FY22, which may take FY23 EPS to Rs 20. Buy for 30% gain.
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• *Imagica* with one theme park trades at a mktcap of Rs1300cr+. whereas *Wonderla Holidays* with 3 theme parks and one resort trades at a mktcap of less than 2000cr. Wonderla is a debt- free co. promoted by the V-Guard family. If its Q1 is any indication, the stock can double from current levels.
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• *Foods & Inns*, second largest processor and exporter of fruits & vegetable products, has now ventured into spices and frozen food and posted Q1 EPS of Rs.1.4. At Rs.72 and a PE multiple of less than 15x, the stock looks attractive for a good 50% upside. Its 52-week H/L stands at 125/56.
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• *Zomato* has risen from the ashes and how. From a low of Rs.40, the stock rose all the way to Rs.69 and trades near Rs.60 level. Any dip towards Rs.55 can be a good entry point for medium term investors.
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• *Navkar Corp*. sold a container freight station to Adani Logistics for Rs.835 cr. The divison contributed less than 50% of its revenue and it intends to turn debt-free by this sale. Buy it at declines for a good 25% appreciation.
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• *HB Stockholdings*, a debt-free NBFC, trades at 0.60 times its Book Value. This undervalued micro-cap stock with 53% promoter holding and 9% with Investor Education Fund may show some really quick move.
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• *AMJ Land Holdings* is into real estate in Pune and sale of 4.6 MW of power from its 3 wind mills. Against mktcap of Rs130 cr., it has Rs13.39 as cash and investments at book value of Rs 55 cr. Stock trades cheap at PE of just 11x against industry average of 27.6x. Buy for some quick gains.
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• *Nitin Spinners*, manufacturer of Yarn and Cotton Knitted fabrics catering to prestigious clients in India and overseas, is in an expansion mode for the next two years. The stock is trading at attractive PE of just 4x and may give 50% returns within 1 year.
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• *KCP Ltd* is into cement, sugar, heavy engineering, power generation for captive use and hospitality. Rising cement prices in southern states will boost its profits further. Stock trading at 10 PE looks attractive, Buy for 30% returns in short term.
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• The watch list of a market veteran for this week includes *Akar Auto, AMJ Land, Cords Cable, Denis Chem Lab, Deepak Spinners, ITD Cementation India, Nelcast, RDB Rasayan, Rexnord Electronics, Sarthak Metals, Tyche Industries and Vedavaag Systems*.
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• *Cords Cable* posted good Q1 numbers. It has huge reserve of Rs.139 cr. on equity of Rs.13cr. Lok Prakshan, publisher of Gujarat Samachar holds 3.20% stake. Buy for good gains.
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• *RDB Rasayan*, a reputed packaging supplier, posted 49% higher Q1 net profit of Rs.8.90cr. v/s rs.5.99 cr. in Q1FY22. Promoters hold 69.83%, HNI Sangeetha S holds 2.16%. Stock is available at an attractive PE of just 7x. Its 52-week high is Rs.128. Buy for quick gains & multi-bagger return in long term.
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• *Rexnord Electronics & Controls* posted 62% higher Q1 net profit of Rs.2.69 cr. v/s Rs.1.66 cr. in Q1FY22. Promoters hold 69.84%, HNI Sangeetha S holds 5.24%. Its 52-week high is Rs.93. Buy for very good returns before Diwali.
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• *Sarthak Metals* is a 20% dividend paying company that posted Q1 net profit of Rs.8.58 cr. on its small equity of Rs.13.69cr. Promoters hold 69.83% while HNIs Anandkumar Jain holds 1.31%, Mayur Bhatt holds 3.32%, Sanjay Jain holds 1.56% & Sunil Agarwal holds 2.34%. Stock is available at an attractive PE of just 7.6x. Buy for good returns by Diwali as its products are in good demand.
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• *Tyche Industries* posted 83% higher Q1 net profit of Rs.3.17 cr. v/s Rs.1.73 cr. in Q1FY22. Its equity of Rs.10.42 cr. has big reserves of Rs.94 cr. Promoters hold 62%. This pharma co. is available cum 15% dividend at an attractive PE of 11x. Its 52-week high is Rs.228 and it may give multi-bagger returns in the medium to long term.
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• *Vedavaag Systems* posted Q1 net profit of Rs.2.44 cr. v/s Q4FY22 net profit of Rs.1.08 cr. Co. is in the field of internet on things & other e- governance solutions, retail, logistics & educations services. Its 52 weeks high is Rs. 92 but is now available around Rs.50. Buy for short to medium term gains.
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• NSE listed *Ajooni Biotech’s* agreement with IFFCO Kisan is bearing fruit as it plans to expand and set up a new unit for veterinary feed supplement.
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• *Integra Essentia* has received orders of Rs. 11cr. to supply premium dry fruits, which will help it surpass its Q2 revenue target. Co. has also acquired a Rice processing facility.
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• *Mishtaan Foods* to launch Himalayan Pink Mishtaan salt on a pan India basis through its network of 40000 dealers.
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• *Cerebra Integrated Technologies* has set up one of India’s largest e-waste disposal facility recording quarterly turnover of Rs.107.43 cr.