Bulls & Bears: D Street Signals

Bulls & Bears: D Street Signals

Wassup n down in Markets -Money Times view

By Arrangement with MONEY TIMES 

•    Sustained demand for tractors is pushing up the share price of Escorts Ltd. given the good rainfall, growing rural economy and greater govt. support to farmers. Although its share looks a little expensive, there is a lot of room to grow. Add selectively.

•    TCS reported better than expected 7.2% rise in Q3NP and has guided for double digit growth next year. This stock merits a place in every portfolio. Add.

•    SBI has cut interest on home loans by 30 bps and waived off processing fees. The share price is in for a big jump. Add.

•    An Ahmedabad analyst recommends to buy APM Ind, Everest Organics, Freshtrop Fruits, Hisar Metal, Hariyana Ship, Mangalam Organics (Due To increase in camphor price and 2.17% stake by D Mart fame R.K.Damani, Mangalam Organics can be a Multi-bagger of 2021-22), Morepen Labs, Nitta Gelatine and NB Ventures

•    Crude oil has hit an 11-month high on Saudi Arabia’s pledge to cut output. Buy small cap Selan Exploration, which sells its crude to the government at international prices.

•    Reliance Infra has sold its stake in Parbati Koldam Transmission for Rs. 900 cr. reducing its debt to Rs. 13,100 cr. Other major receivables will bring it down further and a debt-free status in the next few quarters is a possibility. Start accumulating.

•    Having failed to meet its divestment targets, the govt. will seek big dividends from cash rich, high book value PSUs like REC, PFC, Gail, PTC, Coal India and NMDC. Invest for good dividends.

•    Sunteck Reality is witnessing growth in sales and earned Rs 350 cr. in Q3 bookings. The prospects remain bright for the next few quarters too. Buy.

•    With sharper focus on healthcare both Thyrocare and *Kilpes*t, are likely to witness rising volumes and profitability on the back of Covid testing and other preventive tests.

•    CESC Ltd, a fully integrated electrical utility with interests in property & business process outsourcing, has posted 24.7% net profit jump to Rs. 328 crore on an 8.3% rise in revenue. Buy and hold for long.
The Cabinet Committee on Security has cleared a Rs. 48,000 cr. deal to procure 83 indigenous LCA TejasMk1A fighter jets from HAL. A big buy for handsome gains.

•    Mercedes has lined up 15 launches next year and plans to double its sales in the next three years. Force Motors, which makes its engines and other parts, will be a big beneficiary. Buy.

•    The Lumax group is planning to expand capacities at its Gujarat and Haryana plants. Both Lumax Ltd. and Lumax Industries are good buys, Add.

•    Wipro’s Q3FY21 profits were higher by 21% QoQ and the best in the last 22 quarters. This share deserves a place in every model portfolio. Buy and keep for long.

•    Harita Seating Systems posted good Q3FY21 results with an EPS of Rs. 7.72 (H1FY21: Rs. 13.23) aided by the big pent up demand. The share price can rise further.

•    Dr. Reddy’s Lab has launched Febuxostat tablets, a generic version of the drug Uloric after approval of USFDA. A good business opportunity for the Company. Add in small quantities.

•    GNA Axles consolidated Q3 net profit surged 249% on a 29% rise in revenues. The results are reflected in its rising share price. Add.

•    The Britannia share, which shed some ground in the last few months, shows signs of breaking out. New launches may take its price back to Rs. 4100 + levels. Start accumulating.

•    Bird Flu is spreading fast. Companies gearing to fight poultry disease can be big beneficiaries. Buy, Hester Bio, Rosari Biotech, and Titan Biotech.

•    Karnataka Bank posted good Q3FY21 results. Profits grew 10% QoQ in spite of a 6% decline in revenue. While other banks are grappling with rising NPA issues, this bank is comfortably placed with provisions and contingencies declining 32% to Rs 214.18 cr. Add.

•    Bird flu scare and related diseases will drastically bring down the demand for poultry products. Sell and stay away from Venkys and Simran Farms.

•    *Avenue Supermarkets (DMart) * has scaled an all-time high on strong Q3 figures. However, considering that a market correction cannot be ruled out at higher levels, this share seems overpriced at the CMP. Sell now and buy later.

•    Pitti Engineering, an integrated engineering solutions provider, has expanded capacity from 36,000 MT to 46,000 MT for sheet metal components and notched 45% higher Q2FY2 EPS of Rs 3.2 and is expected to post FY21 EPS of Rs 10. A reasonable P/E of 8 can take its share price to Rs 80. Buy.

•    Cochin Minerals Rutile, which manufactures quality Synthetic Rutile and Aqua Ferric Chloride having wide applications has notched 30% higher net profit in Q2FY21, which could lead to FY21 EPS of Rs 12 on its small equity of Rs 7.8 cr. Buy.

•    Ajanta Soya, manufacturer of Vanaspati and cooking oils, posted 60% higher Q2 net profit. Having completed its expansion in Dec 2020, the higher production will push the expected FY21 EPS of Rs 14-15 to Rs 20+ in FY22. The share may double from the current level. Buy.

•    INEOS Styrolution, a 75% German MNC, is a leading global styrenics supplier focused on styrene monomer, polystyrene, ABS Standard and Styrenic specialties with world-class production facilities and over 85 years of experience. It may produce mind-blowing results after Bhansali Engineering in the same business. The Ineos share can double from the current level.

•    Talbros Engineering, a leading auto components manufacturer for automobile OEMs, having four plants and installed capacity of 3 Million Axle Shafts annually, is a strong company with a share book value of Rs 124. The recovery in the auto sector will push its earnings going forward from Q2FY21 EPS of Rs 6.3 and likely FY21 EPS of Rs 20+. Buy with a target of Rs 200.

•    Samkrg Pistons & Rings, which made a life-time high of Rs 379 on 15 Jan 2018, makes engine pistons and piston rings and exports 25% of its production to over 24 countries. It posted Q2FY21 EPS of Rs 6.3 and may post FY21 EPS of Rs 18 on revival of the auto sector. The share may cross the Rs 180 mark. Buy

•    RTS Power having plants in eight locations in manufacturing transformers, cables, conductors and galvanized steel wire has notched 483% higher Q2 net profit and may post FY21 EPS of Rs 12. A reasonable P/E of 7 can take its share price to Rs 84 in the medium term. Accumulate.

•    Deccan Cements, manufacturer of a wide variety of cements including specialty cement conforming to BIS, British and ASTM standards, is expanding and posted H1FY21 EPS of Rs 43. It may post FY21 EPS of Rs 60+ on its small equity of Rs 7 cr and its share can rise over 30% in the short-to-medium term. Buy.

•    Nava Bharat Ventures has a conversion agreement with Tata Steel Mining, a wholly-owned subsidiary of Tata Steel for conversion of 70,000 TPA of high carbon ferrochrome from 1 December 2020 to 31 March 2025. Going by the half-yearly trend, it may notch FY21 EPS of Rs 22-24. It is the cheapest metal share. Buy.

•    Kirloskar Oil Engines with four manufacturing plants and a nationwide network of operations is the market leader in engines for construction equipment with 30% market share. It has notched 46% higher Q2 net profit and may garner FY21 EPS of Rs 12. The share can gain 20-25% in the medium term. Accumulate.

•    With a strong H1FY21 and sound business prospects in H2 driven by favorable agronomic conditions and strong agri-commodity prices, UPL Ltd. has redeemed its US$ 410 million Notes early on 281220 with the cash in hand and de-leverage its Balance Sheet. This will save it huge interest costs resulting in higher EPS. Buy for 20%+ gain.

•    Datamatics Global Services sold its 62.5% in Cignex for Rs 124 cr. and may notch FY21 EPS of Rs 12. Its pandemic hit projects had delayed new assignments and it decided to reduce operating costs, which would result in higher EPS. The share may appreciate by 30% going forward. Buy.

•    Patels Airtemp manufactures an extensive range of Heat Exchangers, Air Cooled Heat Exchangers, Pressure Vessels, Air-conditioning and Refrigeration equipment and Turnkey HVAC Projects posted FY20 EPS of Rs 22.2 and may post FY21 EPS of Rs 24. A reasonable P/E of 8.5x can take its share price to Rs 204 in the medium term. Buy.

•    Jaspal Bindra, ex-CEO of Standard Chartered Bank, has stated his intention to turn Centrum Capital into a bank in his media interactions last week. This share is a sure shot multi-bagger in the making

•    The growth story of Kopran Ltd has just begun. With new plants and capacities going on stream, this pharma stock will be a multi-bagger in three years.

•    Hemisphere Properties owned jointly by the govt. and the Tata group holds vast tracts of land across India valued at around Rs 20000 cr. But the stock trades cheap at Rs.4000 cr. valuation. The govt. can easily divest its stake or sell the land holdings since Hemisphere does not have an employee union since its employee strength is less than 10. Buy at every decline.

•    Idea Cellular has gained almost 40% since our recommendation at Rs.10 level. Book part profit and add again if it falls to Rs.10 level.

•    Burger King has seen massive decline from Rs 210 level to Rs.145 currently. Any decline towards Rs.130-135 level would be a great opportunity for medium to long term investment

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