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Bulls & Bears: D Street Signals - Feb 27

Wassup n down in Markets -Money Times view

MONEY TIMES TALK - FEBRUARY 27, 2021

•            Ambuja Cement posted 34% higher Q3FY 21 NP of Rs. 968.2 cr. on the back of strong performance in terms of price, volume and costs. Add this consistent performer.

•            P&G stock rose about 14% in one month on excellent Q3 working with 18% higher sales beating other FMGC companies. Hopeful of a double digit growth, most analysts recommend it for buying.

•            An Ahmedabad based analyst recommends to buy BCL IND (Bclil),Haldyn Glass, ITL Industries , K G Denim, RDB Rasayan (Rdbrl), (South India Paper(Sthinpa) & VLS Finance

•            UPL, a global agrochemicals company, to source the liberal fund flow to India by raising $ 500 mn debt to swap its existing high cost debt. Add on declines.

•            Vivimed Labs has received approval from Uzbekistan for its Febriul syrup, a paracetamol medication to treat pain and fever. At Rs. 17.70, this small cap pharma stock is a steal. Buy.

•            The markets took a big knock on news of big spurt in Covid-19 cases. A bounce back is imminent. Buy REC and PFC, which fell the most and are on the verge of delivering big time dividends.

•            Oil India is to picking up the government’s 12.35% stake in Numaligarh Refinery. A big positive for the Company. Add at current beaten down prices.

•            Adani Ports witnessed rising volumes and the acquisition of Dighi Port will help it post better results. The management also plans to reduce its share pledge. Good for the long-term. Add.

•            In spite of wonderful working during Q3FY21, the share price of IOL Chemicals has corrected big. There is practically no downward risk now. A big bounce back is likely. Buy.

•            Copper prices are rising and Hind Copper, Vedanta, and Hindalco are recommended as good buys. Add.

•            On the back of rising demand, Indiabulls Housing plans to raise upto $ 200 mn. As the share is available at its rock bottom prices, it’s a good long term buy.

•            Bharat Forge partners with Paramount group to make armoured vehicles for the Indian Army. Given the government’s top priority to India made defence products, this share must be added.

•            CSB Bank, formerly Catholic Syrian Bank, aims at 30% growth in the next few years. Buy for the long term.

•            United Spirits, India’s largest liquor company, is revamping its product portfolio to enhance sales and profits for sustained long term profitable growth. Add.

•            The smartphones market is set to cross Rs. 2,00,000 crore mark in 2021. To help curb imports, Dixon plans to set up a Rs. 100 cr. plant and apply for the PLI (Production Linked Incentives). Buy this potential multi-bagger.

•            NTPC has signed pacts with GAIL to acquire 25.51% stake in Ratnagiri Gas and Power from the latter. A big positive for NTPC. Add.

•            Cochin Shipyard has a Rs. 10,000 cr. order from Ministry of Defence to make six missile vessels. It can build ships up to 110,000 DWT and repair ships upto 125,000 DWT. A very good long term buy.

•            ONGC is one of the highest paying company consistently maintaining a ratio of around 45% in the last decade. With long term sustainable growth in the pipeline, this Navratna share must be added.

•            L&T Technology Services has partnered with Airbus to provide technology and digital engineering solutions. A big positive. Add in small quantities

•            Coal India to declare its 2nd interim dividend on 5th March. This cash rich company has huge capex plans. This share must be added as it is least vulnerable for a fall.

•            IIFL Securities to acquire Karvy Accounts. This new business opportunity can lift the price of IILF. Add.

•            Cadila Healthcare has received the USFDA nod to promote anti-depressant drug nortriptyline hydrochloride capsules. The group has 313 approvals and has filed over 400 ANDAs in the last 17 yrs. This evergreen pharma stock deserves a place in every portfolio.

•            Aluminum prices have risen over 20% at the Shanghai Metal Exchange. Buy Hindalco for a target of Rs 390 +.

•            After its spectacular results, Asian Paints has corrected 20% from the top to form a base near Rs 2300. Buy for a reversal target of Rs 2700.

•            Aditya Birla Fashions Retail is well-positioned with popular brands like Forever 21, Allen Solly, Van Heusen etc., luxury brands like Jaypore, Ralph Lauren, Ted Baker etc. and recent acquisitions of premium brands like Sabyasachi, Tarun Tahiliani and Shantanu & Nikhil. This is a portfolio stock with a medium term target of Rs 300.

•            Ace investors have bet big on Va Tech Wabag as it has received multiple orders from the government. The stock is in a good momentum with volumes. Buy for a target of Rs 360.

•            Raymond has given a good breakout from Rs 360 odd levels with volumes after a long 8 months consolidation. Buy for a target of Rs 500+.

•            Balmer Lawrie and State Trading Corp (STC) are yet to participate in the PSU rally. STC has a very low free float and used to trade above Rs 1000 a few years ago. Buy both stocks for a quick 50-100% returns in the short term.

•            Jubilant Industries’ ‘Jivanjor’ adhesive brand is doing well competing with Fevicol. The company recently restructured its business for better operational management. The stock can turn out to be a multi-bagger.

•            Vinyl Chemicals promoted by Pidilite manufactures Vinyl Acetate Monomer (VAM). With VAM prices rising 70% in a month, the stock may record 50% upmove from hereon.

•            Indiabulls Realestate trades cheap at a market cap Rs 4000 cr. considering its plan to merge the Embassy group, one of the largest real estate developers in India, with itself. Also, Embassy had bought the stock at Rs.150 a year back. Buy at every decline.

•            Religare recommended around Rs.40 level some months back has gathered momentum as it hit a high of Rs.95 last week before it fell to Rs.80 level in Friday’s carnage. With the ads of CARE health insurance, its subsidiary, visible everywhere, the stock is due for a re-rating.

•            Hemispehere Property has allotted non-cumulative preference shares to the govt. and raised Rs.700cr. to pay stamp duty for the Delhi land. Imagine the value of the land if the stamp duty is 700cr.! The stock trades cheap at a market cap of under Rs.5000 cr. Buy at every decline for multi-bagger gains.

•            Amarjothi Spinning, producer of all varieties of yarn with 17.6 MW of wind power, has registered 61% higher an EPS of Rs 7.6 in Q3FY21 and 17% higher EPS of Rs 16.9 in 9MFY21. This could lead to FY21 EPS of Rs 25 on its small equity of Rs 6.8 cr. The share may cross the Rs 150 mark. Accumulate.

•            GNFC, manufacturer of fertilizers and chemicals has posted 114% higher Q3 EPS of Rs 15.6 and 45% higher EPS of Rs 24.9 in 9MFY21, which may take its FY21 EPS to over Rs 42. This share, which made a life-time high of Rs 548 on 24 Oct 2017 has all the potential to touch Rs 420 mark. Accumulate.

•            LG Balakrishnan & Bros., the No.1 OEM supplier of Drive Chains with 70% market share and about 50% in the Replacement market, supplier of forgings to all 2 Tier OEMs and the largest exporter to USA has achieved 93% higher Q3 EPS of Rs 17. This can lead to FY21 EPS of Rs 42 and to Rs 55 in FY22 on robust prospects of the auto sector. The share may advance by over 50% in the medium term.

•            Sree Rayalaseema Hypo Strength, major producer of calcium hypochlorite and stable bleaching powder with 21.25 MW of captive power, has posted 64% higher Q3 EPS of Rs 10 and 77% higher 9MFY21 EPS of Rs 27.4, which may lead to FY21 EPS of Rs 40. The share can rise by over 50% on concerted buying.

•            GHCL with 25% market share of soda ash and into home textiles with captive power has notched Q3 EPS of Rs 12.4 and 9MFY21 EPS of Rs 22.6 and may post FY21 EPS of Rs 34. This share, which hit a life-time high of Rs 357 on 24 Jan 2018, can fetch 30% gain of 30% in the medium term.

•            Swelect Energy Systems, a leading global Solar Power Systems company has posted 321% higher Q3 EPS of Rs 5.9 and 550% higher 9MFY21 EPS of Rs 20.1. With cash/investments of Rs 390 cr. and a share book of Rs 472, a reasonable P/E of 12x can take its share price to Rs 336 mark on a likely FY21 EPS of Rs 28. Buy.

•            Welspun Corp with overseas customers like Saudi Aramco, Total, Qatar Petroleum, Exxon Mobil and Kuwait Oil and domestic ones like BPCL, IOC, GAIL, RIL, GSPL, and L&T has an order book of over Rs 6,500 cr. and can notch FY21 EPS of Rs 25. The share is available at a steep discount of 36% from its 52-week high of Rs 204. Accumulate for 30% gain.

•            GIC Housing Finance, in which Govt. of India holds 42%, has reported 329% higher Q3 EPS of Rs 11.3. Buy for 25% gain.

•            Suryaamba Spinning established in the domestic and export markets with a wide range of polyester and viscose spun yarns and blended synthetic yarns has garnered 9MFY21 EPS of Rs 8.3 and may notch FY21 EPS of Rs 14 and FY22 EPS of Rs 20 on its small equity of Rs 2.9 cr. The share can double in a year.

•            Uflex Ltd. completed its expansion in Poland, set up a Rs 850 cr., 63,000 TPA greenfield plant in Karnataka and Rs 110 cr., 18,000 TPA plant in UAE, has notched 89% higher Q3 EPS of Rs 22 and 116% higher 9MFY21 EPS of Rs 80, which could lead to FY21 EPS of Rs 100+. This share, which made a life-time high of Rs 507 on 26 Dec 2017 has the potential to appreciate by over 30% in the medium-to-short term. Buy.

•            Deepak Fertilizers & Chemicals, the diversified ammonia downstream player currently under major expansion has notched 164% higher Q3 EPS of Rs 8.7 and 328% higher 9MFY21 EPS of Rs 30.4 may post FY21 EPS of Rs 40 on improved margins. Some funds have now added this share in their portfolios. A conservative P/E of even 6x can take its share price to Rs 240 in the medium term. Buy.

•            Apar Industries into conductors, cables, speciality oils and lubricants with 45% sale by exports to 100 countries has notched 125% higher Q3 EPS of Rs 21.6 and may post FY21 EPS of Rs 50. The share, which made a life-time high of Rs 909 on 31 May 2017 is expected to touch Rs 600 at a forward P/E of 12x in the medium term. Buy.

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