Bulls & Bears: D Street Signals – Apr 24, 2021

What To Buy & What To See

MONEY TIMES TALK – 24 April 2021

• Investors with a medium-term perspective can add small cap pharma, Hikal Ltd. The Company has reportedly beaten its peers in terms of profitability and revenue growth. Add.
• Mindtree’s double digit growth is likely to be maintained on the back of strong deals in the pipeline and rising margins. Add.
• PVC Pipe maker, Finolex Industries, is witnessing heavy demand from the affordable housing sector. Both volumes and price are on a rising trend. Add.
• Time for bargain hunting.  Prakash Industries, which is strongly placed in the power and steel sectors, has become a lucrative buy at around Rs. 75/-. A must buy.
• The demand surge for oxygen prompts Everest Kanto Cylinders to ramp up production. A selective buy with a year’s horizon may give good returns.
• Titan Biotech refuses to fall and is immune to Covid-19. It may post a bumper EPS of around Rs. 40. As a vaccine transporter, it will do well for the next many quarters and its share price is likely to double in a year. Buy.
• As expected & recommended, Bajaj Consumer posted 2x jump in Q4 NP of Rs. 55 cr. YoY. This excellent performance may continue. Keep adding.
• ACC Q1CY21 profit surged 74% to Rs. 563 cr. on the back of strong surge in demand from the infrastructure sector and good operating efficiency. Add.
• The MET predicts normal rainfall this year. GSFC and Rama Phosphates are good shares to consider for investment. Add.
• KEC International has orders worth Rs. 1245 cr. in India, Middle East, Africa and USA. Its total order book stands over Rs. 12,000 cr. An excellent longterm investment.
• Philips Carbon (RP-Sanjeev Goenka Group) Q4FY21 PAT has jumped 75% to Rs. 128 cr. The share is on an uptrend. Add.
• ICRA has upgraded the rating of defence major MTAR Technologies on the back of better working and order book position and its strong net worth. The share price may double in two years. Add.
• TV18 Broadcast’s Q4 NP soared over 77% to Rs. 251 cr. This Reliance group share can be added at the current levels.
• HeroMotoCorp has temporarily suspended operations at some plants in the wake of rising Covid cases. Sell now buy later.
• Indiabulls Housing to co lend mortgages with HDFC. Common lending norms will help Indiabulls remain a balance sheet light business model. Add.
• M&M is scouting for land to set up a tractor plant to meet future demand. With big expansion plans the board, the company is on track for a brighter future. Buy.
• Triveni Engineering into sugar, power, distillery, wastewater treatment and gearboxes for defence has posted 109% higher Q3 EPS of Rs 3.9, which could lead to FY21 EPS of Rs 14. Buy for 30% appreciation.
• Swelect Energy Systems, a leading Solar Power Systems company, has posted 321% higher Q3 EPS of Rs 5.9 and 550% higher 9MFY21 EPS of Rs 20.1, which may lead to FY21 EPS of Rs 28 on its equity of Rs 15.2 cr. A reasonable P/E of 12x can take the share price to Rs 336. Buy for 40% gain.
• Goodluck India manufacturing Automobile CDW Tubes, Forged Engineering Products, T&D Towers, Boiler Structures, Galvanized Pipes, Roofing Sheets & Annealed Sheets posted Q3 EPS of Rs 4.8, 9MFY21 EPS of Rs 9.2 and may post FY21 EPS of Rs 14.5 on its equity of Rs 4.6 cr. Buy for decent gain.
• Mangalam Drugs has notched Q3 EPS of Rs 4.1, 9MFY21EPS of Rs 16.3 and may post FY21 EPS of Rs 24. The share can touch Rs 220 mark on a reasonable P/E of 10x. Accumulate.
• The promoters of Deepak Fertilizers & Chemicals are increasing their stake in this Rs 4700 cr. diversified ammonia downstream player currently undergoing major expansion. It may post FY21 EPS of Rs 40. Buy for 30% appreciation.
• Ineos Styrolutions posted Q3FY21 EPS of Rs 58.6 and 9MFY21 EPS of Rs 67.6, which could lead to FY21 EPS of Rs 135 in FY21. A conservative P/E of 15 for an MNC can take its share price to Rs 2025 in the short term and Rs 2550 in the medium term.
• Shilp Gravures has garnered 404% higher Q3 EPS of Rs 7.2, 320% higher 9MFY21 EPS of Rs 14.3, which could lead to FY21 EPS to Rs 20. The share may advance by 50%. Buy.
• Kaveri Seed Company, a leader in key crops commanding 8% of the market is expected to notch FY21 EPS of Rs 60. Heavy investment buying is reported in the counter. A reasonable P/E of 14x can take its share price to Rs 840. Accumulate.
•  Poddar Pigments is the first to manufacture Masterbatches for dyeing Polypropylene, Nylon & Polyester Multifilament Yarn/ Fibres. It is faring quite well and running at almost 100% capacity. The stock is going cheap at Rs.210 at a P/E multiple of 6x compared to Plastiblends which trades at over 20x.
• Everest Kanto flared up last week because of its oxygen cylinders. Time Technoplast is the other large manufacturer of gas cylinders that may convert its CNG cylinders for use in medical oxygen one. Buy for a quick 20%.
• After almost 3 months, the exchange has promoted around 200 stocks from T2T to their normal groups from Tuesday. Notables that may see heightened activity are Hemispehere Property, Digispice Technologies, Mirc Electronics. They suffered by lack of activity in the T2T group but may now can give 20-30% bounce.
• Suven Lifesciences recommended 2 weeks ago @ Rs.80 hit a high of Rs.116 last week and settled around Rs.103. With promoters infusing Rs.200 cr. @ Rs.82 per share, the stock has the potential to double from the current levels
• Wonderla Holidays has temporarily shut its Bangalore park due to surging Covid cases. The working for this quarter is likely to be severely hampered. Sell now enter later.
• Infosys and PP, an integrated energy company, have signed an MOU to provide end-to-end services to customers. Infosys continues to find new profitable applications that can be long term profit centers. Keep adding in small quantities.
• Gland Pharma has the UDFDA nod to make the generic Foscarnet Sodium Injection for treatment of HIV and HSV (Aids related complications) and has launched the product in Canada and will also do so globally. A good long-term investment.
• Swaraj Engines posted a robust Q4FY21 on the back of strong sales of tractor engines and declared Rs.69 as dividend. With expectations of a normal monsoon and higher foodgrain production, the share remains a good buy.
• Alok Textile is the biggest PPE kit manufacturer in India. The current Covid-19 is a positive for the company. It is a technical BUY for the short term with a Stop Loss of a close below Rs 20 for a target of Rs. 33.
• Filatex India posted bumper Q4 results with the highest ever EBITDA, Margin and PAT. Revenue came at Rs. 858 cr. vs Rs. 673 cr., PBT of Rs.173 cr. vs. Rs. 91 cr. QoQ, Q4 EPS of Rs. 5.4 cr. and FY21 EPS of Rs. 7.2. Buy for the medium term with a target of Rs.140.
• The Sugar cycle has started and is here to stay. The govt’s plan to raise ethanol blending with petrol to 20% by 2025 sent the industry expanding capacity to meet the 10 billion litre target by 2025. This will be an add-on support for the industry. Buy Dhampur Sugar for a target of Rs. 290.
• Aditya Birla Fashion leads retail fashion with brands like Forever 21, Allen Solly, Van Heusen etc. In luxury brands, it has Jaypore, Ralph Lauren, Ted Baker and others. Its recent acquisition of premium boutique brands like Sabyasachi Mukherjee, Tarun Tahiliani and Shantanu & Nikhil add value to its portfolio. Buy for a medium term target of Rs. 300.
• Apar Industries’ 45% export sales of conductors, cables, speciality oils and lubricants led to 58% higher Q3 EPS of Rs 21.6 and likely FY21 EPS of Rs 48. A reasonable P/E of 12.5x can take the share price to Rs 600 in the medium term. Buy.
• Vindhya Telelinks into cables and EPC business posted Q3 EPS of Rs 48 and 9MFY21 EPS of Rs 130 and may end with FY21 EPS of Rs 180. It has Rs 2300 cr. stake in Birla Corporation and Universal Cables too. Trading at a forward P/E of 4.4x, the share can double from the current level. Buy.
• Coral Laboratories with low equity of Rs 3.6 cr. and book value of Rs 365 has notched 106% higher Q3 EPS of Rs13 and 324% higher 9MFY21 EPS of Rs 33, which could lead to FY21 EPS of Rs 50. A reasonable P/E of 10x can take the share price to Rs 500 in the medium term.
• ISGEC Heavy Engineering has tied up with United Conveyor Corporation of USA for Dry Sorbent Injection Technology and notched 51% higher Q3 net profit. It is likely to notch FY21 EPS of Rs 30 the share can touch Rs 660 mark. Buy for 20% return.
• Expleo Solutions posted Q3FY21 EPS of Rs 12.3 and 9MFY21 EPS of Rs 38.5 is all set to garner FY21 EPS of Rs 60. This underpriced share can touch Rs 750 mark at a conservative P/E of 12.5x in the medium term. Accumulate.
• An Ahmedabad based analyst recommends to buy Cenlub, Gallantt Metal, GEE,H P Cotton, Hind Tin, Ind Swift Lab, Indian Toners, Magadh Sugar Energy, Madhav Marbles Granite, Shilp Gravures and Tinplate of Tata Group.