Money Times Talk weekly news
30 October 22
Govt-owned *Mazagon Docks* makes some of the best submarines. A compelling stock for the long term. Buy.
Auto industries focused, *KPIT Technologies’* Q2 profits surged 28%. The Company has guided for yearly profits to be higher by around 32%. A great buy.
In the Textile Apparel space, *SPL Industries* could record FY23 EPS of Rs 16+. Even a PE multiple of just 10x against the industry average PE Ratio of 44.25x justifies a share price of above Rs 160 within a year. Buy.
*RIL’s* Q2 profit was flat despite a 32% rise in revenue. Since its Jio business is strong, hold the share for the next two quarters before considering switch options in this sideways market.
*PFC’s* abrupt rise in volumes and share price hints of a good dividend and possibly a Bonus issue. Despite this wild guess, the share is an excellent long-term buy.
Divestment candidate *IDBI BANK* posted 46% higher Q2 NP of Rs. 828 cr. Add this share for decent gains in one year.
FMGC major *HUL’s* Q2 sales rose 16% while NP rose around 20%. The share price can rise further. A sound investment in times of crises. Add.
*Laurus Labs’* Q2 NP rose 15% at Rs. 233 cr. While big pharma cos. struggled to improve their bottom-line, this company remained resilient. Add.
*Atul Ltd.,* a well-diversified conglomerate, posted excellent Q2 EPS of Rs. 51.11 v/s Rs. 49 in FY22 despite its sluggish business. Hold the share for better times.
*Steelcast’s* Q2 was extremely good with 57% higher Revenue at Rs. 121.20 cr. and 58% higher PAT of Rs. 17.6 cr. on its equity of Rs. 10.12 cr. leading to an EPS of Rs. 8.68 (Rs. 4.85). Add.
*Ramkrishna Forgings* presented fairly good Q2 compared to its Q1 and previous comparable quarter of Q2FY22. The share may be added in small quantities.
At the recent Defence exhibition at Gandhinagar, *HAL* won a contract to make 40 trainer aircrafts worth Rs. 6800 cr. for the IAF. A very big positive. Buy.
*Dodla Dairy’s* Q2 NP surged 34.2% to Rs 39.45 crore on the back of higher demand & selling price, declining costs and taxes. Add the shares of this integrated dairy.
Microfinance lender *Credit Access Grameen’s* Q2 income jumped 31.6% to Rs 814.31 cr. with PBT of Rs 229.01 cr., triple that of last year. Add this share selectively.
*Coal India* is rallying on the back of rising Capex as Q1 capex jumped 65% to Rs. 3034 cr. With higher production to meet the rising demand, a higher NP and dividend is likely. Add.
*Poonawala Fincorp* with cash of Rs. 5903 cr. on its equity of Rs. 153 cr. is faring very well. People in the know forecast a 4-figure share price in the next three years. Add in small lots.
*Astra Micro* is developing vital defense-related products (radio frequency and microwave solution) for the Indian armed forces along with DRDO. The Company has a great future. An excellent long-term haul. Add.
*Dabur* has acquired 51% stake in Badshah Masala, manufacturer and exporter of spices, for Rs 587 crore and the balance 49% stake will be acquired after five years. A big positive. Buy.
*NMDC* opened at ex-demerger price of Rs. 92 and rose to Rs. 111 before settling around Rs. 101. An interim dividend of about Rs. 6 + may be declared along with the Q2 results shortly. The share may be added.
*REC* not only declared good Q2 results but also declared a higher interim dividend of Rs. 5/share. Buy for the long-term.
*Kaveri Seeds* plans a buyback around Rs.700/per share from non-promoters even as it hovers around Rs. 485. The deal can be up to Rs. 125 cr. Buy for short term to tender in the offer.
*Britannia* continues to post robust results on the back of rising volume and demand apart from control over input costs. This evergreen share from the Wadia stable deserves a permanent place in every portfolio.
*Meghmani Organics*, a multi products chemical major, is setting up a 33,000 TPA White Pigment Titanium Dioxide at Dahej at Rs 600 cr. to be completed by Q3FY24 in two phases raising its capacity from 16,500 to 49,500 TPA. Buy for decent gain.
Heavy buying in *Karur Vysya Bank* was witnessed as analysts projected its share price of Rs 125+ on its mind-blowing performance. The Bank has guided for NIM of 3.8% for FY23 on higher revenue. Buy for 25% gain.
*Electrosteel Castings* having merged Srikalahasthi Pipes is a leader in ductile iron pipes & accessories. It also produces pig iron, sponge iron, Low Ash Metallurgical Coke, ferro/silicon alloys and cement. It has notched 32% higher Q1 EPS of Rs 1.6 as against FY22 EPS of Rs 5.8, which indicates that FY23 EPS could be Rs 8.5. Buy for 35% gain.
*Career Point’s* diversified operations with multiple product offerings including Test Preparation, K-12 Schools, Residential Coaching, e-Learning, Private Universities, and Skill Development across India with e-&-Digital Learning has notched 42% higher Q1 EPS of Rs 5.2 as against Rs 12.6 in FY22. This may take FY23 EPS to about Rs 20. Buy for 30% gain.
*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.
Paper shares are rising on heavy investment buying on the back of solid performance. *Shreyans Industries,* whichmanufactures writing & printing paper and has a 12 MW captive power plant, has notched Q1 EPS of Rs 6. This could take FY22 EPS to about Rs 20-22. Buy for 25% gain.
*Dhunseri Ventures*, which is into polyester and PET packaging, is setting up a packaging film unit. It notched 82% higher Q1EPS of Rs 50.4 against FY22 consolidated EPS of Rs 102.5, which may lead to FY23 EPS of Rs 160+. Buy for 40% gain.
*Refex Industries* into material handling of coal ash and manufacturer & re-filler of Refrigerant gases has garnered 216% higher FY22 EPS of Rs 21.6. Its FY23 EPS may touch Rs 30 on robust prospects of the industry. Accumulate for 25% gain.
*Universal Starch-Chemis* into the starch business, liquid glucose and dextrose products catering to the requirements of Food, Pharmaceutical, Textile, Paper & Adhesive industries. It notched higher EPS of Rs 27.2 in FY22 and FY23 EPS may touch Rs 32+. Traditionally, its H2 gives better results. Add.
*Dhanuka Agritech* will consider the buyback of shares through the tender route. Buy this fundamentally sound stock.
*Jammu & Kashmir Bank* posted 124% higher Q2 EPS of Rs 2.5 and H1 EPS of Rs 4.2, which indicates that FY23 EPS could be Rs 10 against FY22 EPS of Rs 6. The share is expected to fetch a gain of 40%.
*SKM Egg Products Exports* posted 854% higher Q1 NP of Rs.6.49 cr. v/s Rs.68 lakh in Q4FY22. With higher exports likely in FY23, poultry farm expansion by 3 lakh birds and 72 MT Biogas plant at a project cost of Rs.71 cr. would boost its sales & profit in FY23. Good for medium to long term.
*Binny Ltd*. posted 822% higher Q1 net profit of Rs.29.15 cr. v/s Rs.3.16 cr. in Q1FY22 on its small equity of Rs.11.16 cr. Its FY23 EPS may touch Rs.100 v/s Rs.15 in FY22. Promoter holding is 75%. Could give very good return in medium to long term.
*Magna Electro* posted 346% higher Q1 EPS of Rs.9.01 v/s Rs.2.02 in Q1FY22. Its next 2-3 quarters may be better due to increased demand for its products in India and abroad. It has reserves of Rs.74 cr. on its very small equity of Rs.4.23 cr. Add.
*Emami Paper* posted 69% higher Q1 profit of Rs.54 cr. v/s Rs.32 cr. in Q1FY22. It is developing new products & hopes to notch Rs.5000 cr. sales by 2025 from Rs.1958 cr. in FY22. Promoter holding is 75%. It paid 80% dividend for FY22. Can give very good return in the medium to long term.
*Nelcast* manufactures grey & ductile castings for automobiles & railways. About 25% of its revenue is from exports, which will be more remunerative with the depreciating Rupee. Its Q1 profit rose 281% & management expects better Q2 results on Wednesday 2nd Add.
*Gokaldas Exports* has done well in spite of adverse expectations. Consistent performance on the back of proposed capex makes it an attractive investment.
*SP Apparels* is specialized in children wear. Approvals are a big entry barrier. It is available at a reasonable valuation
*Vardhaman Textiles* is the best candidate in the recovery of the textile industry on the back of falling cotton prices. Respected for its corporate governance, this scrip is attractive at its depressed valuation.
*GAIL* owns India’s largest gas line network of over 12500 km that can reach 20000 km in next 3 years. With presence in city gas distribution and petrochemicals, it has robust plans to enter in green power. Stock trades at a PE multiple of just 4x. A safe Buy around Rs 90 level for 50% return in 1 year.
*White Organics Ltd.* markets Agri Products cultivated across 4000 acres. It has a tie- up with Patanjali Ayurveda for Aloe Vera pulp supply over 800 acres and is in the process of setting up more retail Franchise outlets. It posted robust H1FY23 results. Yet the stock trades at PE multiple of just 4x to FY23E earnings. Buy for 50% returns within 1 year.
*Filatex Fashions*, manufacturer of knitted socks for licence holders like Walt Disney and Warner Brothers plans to raise capital to finance its major expansion as decided by its Board of Directors. A decent buy.
*Variman Global Enterprises* collaborates with technology brand ‘TRUTH’ to launch new Digital Age products with Amazon India, its global partner in business.
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