Money Times Talk
25 September 2022
• Despite a consistent fall in input costs, FMGC companies have not cut prices of their packaged food products. Add *ITC*.
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• *GPIL (Godawari Power)* is optimistic about the future and may post FY23 EPS of Rs.100 and merits a buy.
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• *Bank of Baroda* may take a lead over other banks by focusing on loans upto Rs.100 cr. to mid-sized companies. The share could recover its lost glory. Add.
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• *Maruti Suzuki* plans to boost exports in the coming years and lead the automobile industry. A good long-term share to add.
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• With a massive order book of Rs 42,066 cr. as on 30thJune and another Rs.17,000 cr. likely, *IRCON International* may post FY23 EPS of around Rs 6.35. 25% return in the short term and 50% in the medium term is possible from the current beaten down level. Buy.
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• *Premier Explosives* has won huge orders from the Defence Ministry and its working is encouraging. Accumulate.
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• Anil Agarwal of will need ample funds for his semiconductor business. There is every likelihood of a bumper dividend from the parent *Vedanta Ltd*. A good long-term haul.
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• *DJ Mediaprint* to manage NSDL databases and other services. This provides long-term visibility to its profitability. As the share price has already run up a lot, buy on dips.
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• *Dixon Technologies* ties-up with Ibahn Illumination for advanced lighting technology Smart Lighting, firmware, hardware, and cloud-hosted database. Positive for Dixon. Add.
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• *Jai Corp* allied with Mukesh Ambani is developing SEZs in Navi Mumbai. The company has a huge potential. Buy immediately.
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• *Shilpa* innovation of a topical hemostatic spray of Tranexamic Acid has received CDSCO approval. The product has patents in India and other developed countries too. A big buy.
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• *Reliance Power* to sell its non-commercialized plant to clear its huge debt. This will infuse life in this scrip like it did in Reliance Infrastructure. Buy.
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• The armed forces may curtail foreign brands of liquor. Local companies like *Tilaknagar Industries* and *Som Distilleries* ought to be accumulated.
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• Tyre shares have started rising on the fall in input costs. *JK Tyres* and *Ceat* for slow but steady rise in stock prices.
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• The entry of Adani group into the cement sector and their ambition to double the capacity of ACC in the next 5 years makes it a good buy. Buy *ACC*.
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• *Zydus Lifesciences* has launched a generic cancer-treatment drug in USA. Positive for the company. Add.
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• *KEC International’s* T&D division has won orders worth Rs. 1123 cr. which includes a 400 KV Digital GIS Substation order. A visibility of high profits merits a buying.
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• *M&M* to buy 7.22% stake in *Swaraj* presently held by Kirloskar Industries. This deal may make shares of *Swara * to run up. Buy.
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• *Aster DM‘s* pharmacy arm has now forayed into Bangladesh in partnership with GD Assist from UAE. Around Rs. 253, this share may be added.
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• *IOL Chemicals* to invest US$ 2.1 million in USpharma, a US based co. that develops novel drug delivery technologies. Positive for the Company. Buy on dips.
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• After cooling down by over Rs. 20 *Indiabulls Housing* has again turned attractive below Rs. 120. Add.
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• *M&M Financial Services* may be temporarily hit by restrictions on the style and functioning of its Recovery agents. Its share price may dip a little but will bounce back. Accumulate on declines.
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• *SMC Global*, a well-diversified financial services company is a one-stop investment solutions in trading & investments serving over 18 lakh investors in India and abroad with over Rs 3000 cr. AUM. It notched 41% higher Q1 EPS of Rs 3.3 against FY22 EPS of Rs 13.8, which may lead to FY23 EPS of Rs 16. A P/E of 7.5x can take its share price to Rs 120 with a gain of 40%.
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• *Suryalata Spinning Mills* is one of the largest producers of Synthetic Blended Yarns having total installed capacity of 89,376 spindles. It has notched 128% higher Q1EPS of Rs 23 against FY22 EPS of Rs 111.9 which may take FY23 EPS to over Rs 130. Buy for 25% gain.
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• *Capacite Infra Projects* offers project design, construction and management services to real-estate developers, builders and government bodies. It notched 548% higher Q1 EPS of Rs 4.2 on 70% higher revenue against FY22 EPS of Rs 7.1, which indicates that FY23 EPS may cross Rs 18. Buy for 20% gain.
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• *Mazagon Dock Shipbuilders* is primarily engaged in constructing and repairing warships and submarines and other vessels for commercial clients. It notched 101% higherQ1 EPS of Rs. 11.2 against Rs 30.8 in FY22. It has an order book of Rs 43,000 cr., which is 7.5 times of FY22 revenue, and is entering its peak execution phase and may post FY23 EPS of Rs 50. Buy.
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• *Nile Ltd*., manufacturer of Pure Lead and Lead Alloys, is setting up a Lithium-ion recycling plant and also diversifying into the natural extracts to cater to the growing needs of the nutraceutical, cosmetic, and food industries. It notched Q1 EPS of Rs 16.7 against FY22 EPS of Rs 80. Higher demand for its products could lead to FY23 EPS of Rs. 90+. The share is all set to touch Rs 900 in the medium term. Buy.
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• *Indian Hume Pipes* has 12 plants where it makes pipes. It also undertakes projects for water supply, and sewer and drainage lines on a turnkey basis and has also developed railway sleepers. It notched 344% higher Q1 EPS of Rs 4.3, which could take FY23 EPS to Rs 20. Buy for 30% gain.
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• Heavy investment buying is reported in *Savita Oil Technologies*, which markets its products in over 75 countries and posted 13% higher Q1 EPS of Rs 13.1 (FV split into Rs 2) against FY22 EPS of Rs 43.21. This may take FY23 EPS to Rs 50. A PE multiple of just 10x could take its share price to Rs 500 in the medium term. Buyback of shares or bonus may be on the cards. Buy.
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ø *Sarda Energy*, an integrated steel manufacturer with 20 mmt iron ore mine and 125 mw of hydropower, has notched Q1 EPS of Rs 48.2 as against FY22 EPS of Rs 223.this may lead to FY23 EPS of Rs 230+. Buy for 20% gain.
• Debt-free *Jullundur Motor Agency* is one of the largest in Automobile Spare parts distributors with 77 branches, 7 regional offices catering to about 75,000 dealers in different regions. It notched 183% higher Q1 EPS of Rs 2.4 as against Rs 10.5 in FY22. This indicates that FY23 EPS could be over Rs 13. Buy for 30% gain.
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• *Wonderla Holidays* has corrected from a 52-week high of Rs.455 to around Rs.400 level, which is a great entry opportunity to those who missed it earlier. Radhakishan Damani and Dolly Khanna have also entered the stock according to the list of top 100 shareholders.
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• *Selan Exploration* can be bought for good returns in the medium to long term. With a new management with a great track record, at Rs.280 the stock is undervalued and can double from the current level.
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• *AIA Engineering* has tied-up with SAL Steel for its ferro chrome requirement and made a corporate deposit. AIA’s earlier tie-ups with small units like *Steelcast* and *Welcast Steel* saw their stock prices zoom. *SAL Steel* trading at Rs.13 may also turn out to be a multi-bagger.
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• *Hubtown* has crashed from Rs.125+ to Rs.62 on rumors of selling 25 South Bombay. But it still holds 50%+ in the said subsidiary and has a large land bank in Mumbai/Thane across 14 projects. Its market cap at Rs.450cr. v/s landbank is peanuts! Investors with a risk appetite may buy the stock for a 100% appreciation.
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• If *Mcleod Russel* can get a suitor there would be many in line for *Coffe Day Enterprises*, which has corrected from a high of Rs.75 to Rs.57 odd level and provides a good entry opportunity for short term investors for a quick 50% appreciation. Keep it on your radar.
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• *Eicher Ltd*.’s Bullet is roaring. A strong balance sheet and all verticals faring well make it an attractive stock even at these valuations.
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• Another auto story play is *Federal Mogul Goetze*. An MNC with good cash on books should see far better times.
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• *Nestle India* plans a Rs.5000 cr. expansion over the next 2/3 years. This Swiss origin FMCG foods co. with reputed brands is set to fly higher.
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• *Anuh Pharma* is the largest producer of Erythromycin salts and Pyrazinamide in the world. It is among the few with WHO PQ for Sulphadoxine and has applied for WHO PQ for Pyrimethamine (anti-malaria). New products and capacity expansion could deliver 50% returns in 1 year.
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• *Debock Industries* deals in Hospitality, Agri products, Mining etc. Stock has corrected in the last 6 months and has now stabilized trading at just 6x to FY23 E earning Buy for 50% returns with 10% strict stop loss for the short term.
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• NSE listed *Balaxi Pharma* is a debt-free company with 73% promoter holding and equity of just Rs.10 cr. This 100% EOU will benefit by the Rupee depreciation and likely FY23 EPS of Rs.61 v/s Rs.48 in FY22. It plans a manufacturing facility in Hyderabad soon. Stock may double in a year.
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• NSE listed *Kothari Sugars & Chemicals* posted 174% higher Q1 net profit of Rs.23 cr. v/s Rs.8.33 cr. in Q1FY22. Stock is available at PE of just 7.5x. Promoter holding is around 74%. Buy for 50% gain.
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• *Vascon Engineers* posted Q1 net profit of Rs.10.11 cr. vs loss of Rs.7.18 cr. in Q1FY22. Q2FY23 is also likely to be good. Buy for 30% gain.
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• *Vipul Organics*, a large manufacturer of pigments has set up a new plant at Palghar to manufacture emulsion paste, which is a high margin business. Stock is now at an attractive valuation from its 52-week high is Rs.229. Buy for good returns.
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• *SKM Egg Products Export* posted 854% higher Q1 net profit of Rs.6.49 cr. vs Rs.68 lakh only in Q4FY22. Its products prices are & the demand are both rising overseas on the back of a depreciating Rupee will boost its fortunes. Could double in a year.
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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 Buy for 30% gain.
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• *Aimco Pesticides* posted 164% higher Q1 net profit of Rs.2.75 cr. v/s Rs.1.04 cr. for Q1FY22 and paid 20% dividend for FY22. It plans to raise capacity from 4500 to 6000 TPA in FY23 by debottlenecking. If it closes above its 52-week high of 236, a new range up to Rs.275 can open up.
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• *Solitaire Machine* is a debt-free, dividend paying auto ancillary. It is a licensee of Cincinnati Milacron of USA & also licensed by Bocca & Malandrone Sunebo SPA Italy and announced a very good Q1. Now it is expanding capacities with a new plant at Halol. Buy for good returns in the medium to long term.
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• *Mangalam Industrial Finance* has signed an MoU with WardWizard Innovations & Mobility to finance its low cost, high speed electric vehicles to promote green mobility across the country. Buy.
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• Mauritius based Eriska Investment Fund has picked up 7 lakh shares in *Filatex Fashions*, manufacturer of knitted socks with orders from leading international brands. Accumulate.
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• *HKG Ltd*. will become a fully operational Sugar and Ethanol unit after acquisition by a Belgaum based sugar industrialist. Buy for decent gains.
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• *Mishtaan Foods* plans to venture into Ethanol manufacturing at an outlay of Rs.2000 cr.
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• NSE listed *Libas Consumer Products* has announced 1:2 Rights issue at Rs.21 per share. It recently launched bamboo based organic innerwear brand KNG and expand its footprint to the Middle-east.