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Bull & Bears - D Street Signs

Wassup & down this week

Money Times Talk - February 07, 2021

•            KPIT Technologies’ Q3 results will help regain the lost ground due to Covid-19. The Company has an exciting future. Add.

•            Shriram Transport is going full throttle and produced best quarterly results in the last two years. Collection efficiency has reportedly touched 104% levels. Add.

•            Indian Oil declared an interim dividend of Rs. 7.50/share apart from declaring improved Q3 results. The share is available at its book value and merits a buying.

•            An Ahmedabad based analyst recommends to buy APM Finvest, IOl Chemicals, Ind Swift Lab, Magna Electro, Morepen Lab, Menon Bearing and Nitta Gelatine

•            Rama Phosphates has commissioned its Udaipur facility to make LABSA, its Indore facility to make Sulphuric acid is nearly ready and its good Q3 results with revenue from the new plants will boost its stock prices. Add.

•            Dixon Technologies may reduce the FV of its share from Rs. 10 to Rs. 2 to inject liquidity into its scrip. With Q3FY21 profits more than twice of Q3FY20 and orders to make Nokia cells its future is rosy. Add.

•            The Budget has sharply raised allocation on infrastructure and affordable housing. Buy Ashoka Buildcon and Dilip Buildcon.

•            The budget has allocated Rs. 478196 cr. for defence. Buy HAL, BEL, M&M, and Bharat Dynamics.

•            Escorts posted an 81% jump in Q3NP at Rs. 382.49 cr. on 26% higher tractor sales. It also makes locomotives for Indian Railways, which has a very big budget allocation. Add.

•            Dahanuka Agritech’s Q3 profits spurted by over 43% on 9% rise in revenue. The Met department has forecast normal rainfall this year too. A good long term buy.

•            Despite low construction activities, Cera Sanitaryware posted 6% higher profits on a 3% decline in revenue. With big sops for affordable housing it will be a big benificiary. Add.

•            Dr Reddy’s Laboratories has launched Vigabatrin tablets in the USA. There is no stopping this drug major. Add in small quantities for long time to come.

•            Money Times was the first to make an exit call on DHFL when it was hitting upper circuits as retail shareholders are unlikely to fetch any residual value on their holdings upon takeover by new promoters. The sell call continues.

•            Jubliant Foodworks’ (Domino’s Pizza) Q3 PAT jumped 22% to Rs 124 cr. with cash & cash equivalents rising to Rs. 952 cr. from Rs. 828 cr. at end September 2020. With the pandemic receding, its current working should also improve. Add.

•            Butterfly Gandhimathi Appliances posted a stellar Q3. Profit at Rs. 28.54 cr. was 9 times higher from Rs. 3.19 cr. in Q3FY20. The share will continue to rise. Buy.

•            With higher tax benefits for first time affordable housing buyers, the demand is likely to rise. Buy Kolte Patil.

•            The government is firm on divesting BPCL this year. Aggressive bidding will boost its share price. Add.

•            With Mumbai resuming rail travel and Mumbai Metro open to all, Reliance Infra expects to post good results. With release of amounts held up in arbitration, it could turn around sooner than later. A good bet if held for 3 years.

•            REC’s excellent Q3FY21 with EPS rising to Rs. 11.44 in Q3FY21 from Rs. 8.43 in Q3FY20. Its book value has crossed Rs. 211. Although second interim dividend was not declared, it is only a few weeks away. Buy for handsome gains.

•            Bajaj Steel Industries, the only company producing all cotton ginning machinery, posted Q3 EPS of Rs. 33.9 and Rs 70 in 9MFY21 on its Rs. 5 share and could end FY21 with an EPS of Rs 100. It has already acquired land in Butibori (Nagpur) for expansion. The share tradeing at a P/E of 3.2x is expected to double from the current level and is a strong bonus candidate. Buy.

•            LG Balakrishnan & Bros, the top OEM supplier of Drive Chains with 70% market share and about 50% in the Replacement market, posted 93% higher Q3 EPS of Rs 17, which can lead to FY21 EPS of Rs 42 and to FY22 EPS of Rs 55 on robust prospects of the auto sector. The share can rise 50% in the medium term.

•            Vishnu Chemicals manufactures & markets chromium chemicals and other specialty chemicals has posted 41% higher net profit in Q3FY21, which could lead FY21 EPS of Rs 28. The share trading at a forward P/E of 5.9x, much below the industry average PE of 33, has all the potential to appreciate by 30%. Buy.

•            Deccan Cements, manufacturer of a wide variety of cements including specialty cement conforming to BIS, British and ASTM standards with ongoing expansions, has posted HIFY21 EPS of Rs 43 that can lead to FY21 EPS of Rs 60+ on its small equity of Rs. 7 cr. The share can appreciate by 30%. Buy.

•            Amarjothi Spinning, producer of a variety of yarns having windmills of 17.6 MW, has clocked an EPS of Rs 8.6 in Q2FY21 and Rs 9.7 for 9MFY21. With this, Amarjothi is expected to notch an EPS of Rs 22 on its small equity of Rs 6.8 cr. The share is expected to cross the Rs 150 mark. Accumulate.

•            Datamatics Global Services, a global IT, Consulting, BPM and Data Management Company that recently sold 62.5% in Cignex for Rs 124 cr. has notched 112% higher EPS of Rs 3.8 (FV Rs 5) in Q3FY21. With lower reducing operating costs, higher EPS of Rs 13 in FY21 is likely. The share may appreciate by 30%.

•            Pitti Engineering, an integrated complete engineering solutions provider, has expanded capacity from 36,000 to 46,000 TPA for sheet metal components in engineering products has notched 45% higher EPS of Rs. 3.2 in Q2FY21 is expected to notch FY21 EPS of Rs 10. A reasonable P/E of 8 can take its share price to Rs. 80. Buy.

•            Angel Broking, India’s 4th largest stockbroking house has notched 137% higher EPS of Rs 9 in Q3FY21 and 251% higher EPS of Rs 24 in 9MFY21. It made an IPO at Rs 305/share recently is expected to notch an EPS of Rs 37 in FY21. The share is expected to fetch a gain of about 25%. Buy.

•            Eldeco Housing, a leader for over 3 decades in Lucknow, has posted Q2FY21 EPS of Rs 80 and H1FY21 EPS of Rs 117, which could lead to FY21 EPS of over Rs 260+ on small equity capital of Rs 2 cr. The share, which made a life-time high of Rs 2694 on 29 Jan 2018, is expected to touch Rs 3000+ mark. Buy.

•            Substantial investment buying was reported in Vedanta as it reported 41% higher EPS of Rs 8.9 in Q3FY21 and EPS of Rs 14 in 9MFY21. It is expected to notch an EPS of Rs 25 in FY21 and Rs 33 in FY22. The share is likely to appreciate by 30% going forward. Accumulate.

•            Linclon Pharmaceuticals has developed 600+ formulations in 15 therapeutic areas has notched 23% higher EPS of Rs 6.7 in Q3FY21 and 17% higher EPS of Rs 24.8 in 9MFY21 that may lead to FY21 EPS of Rs 32. A reasonable P/E of 12 can take its share price to Rs 384 in the medium term. Add.

•            Prakash Pipes manufacturing PVC Pipes and their related Fittings along with flexible packaging with state-of-the-art plant for customers in FMCG, Food, Beverages, Infrastructure, and Pharmaceutical products is expected to notch an EPS of over Rs 16 in FY21. The share may touch Rs 160 mark. Buy.

•            With a strong H1FY21 performance and business prospects driven by favorable agronomic conditions and strong agri-commodity prices, UPL Ltd has redeemed the USD 410 million Notes with the cash in hand and de-leverage its balance sheet. Most analysts projects its target price of Rs 700+.

•            Triveni Engineering with 7 sugar mills, 6 co-generation units (103 MW) and 1 distillery spread over 8 locations in Uttar Pradesh has posted 109% higher EPS of Rs 3.9 in Q3FY21, which would take FY21 EPS of Rs 14 in FY21. It also manufactures high-speed and low-speed gears and gearboxes for the defence sector and is also into water & wastewater treatment solutions. Buy for 30% appreciation

•            BSE listed Ishan Dyechemicals posted an excellent Q3 with an EPS of Rs.3. It has Clariant, Lanxess, Ciba, Pyosa, and many multinationals as its clients. The stock is available cheap at Rs.55 and can easily appreciate 50% from hereon.

•            *Acrysil*s capacity expansion has begun. With growing demand for home improvement products it plans another expansion. This stock has can double from the current level.

•            Tata Motors DVR trades less than half the Tata Motors stock price. Globally, DVRs trade at just 2-5% discount while some even at a premium of 5-10% because of the dividend yield. Buy this stock for the arbitrage it offers.

•            Cosmo Films’ excellent Q3 and an interim Rs.25/share sent its stock flying to a 52-week high. Some years ago, SRF was trading at similar valuations and the rest is history. Can Cosmo become the next SRF? Some investors think so. Buy at every decline.

•            Home First Finance saw a subdued listing last week. It operates in the affordable housing segment but trades at nearly half the valuation compared to Aavas Finance. The stock is a good buy at every decline.

•            SAIL made a good upmove from around Rs.55 to Rs.65. Sources in the know aver that ace investor, Radhakishan Damani, has bought a chunk in the Offer For Sale and the stock could see heightened activity going forward.

•            Intellect Design’s Q3 numbers matched the management’s forecast. It has won orders competing with Oracle and Infosys. Speculation is rife that it may post FY21 EPS of Rs. 20+, which could see its share price headed towards Rs.600.

•            PNB, a large PSU bank is available at a cheap valuation. Like superb numbers from Canara Bank and SBI, PNB has also delivered good numbers. Buy with a target price of Rs. 60.

•            Som Distillery & Brewery can rebound sharply in the coming quarters. With 3 million cases sold, it still trades at 50% discount to its book value. It generated decent cash in H1FY21 despite the pandemic and reduced its debt. Buy for decent gains.

(Disclaimer: This content is direct feed from MoneyTimes)

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