What to Buy, Not to Buy!

What to Buy, Not to Buy!

Money Times Talk

Caution is the password for investing in stocks as opinion polls and poll rtesults could impact the markets, says Money Times

Elections in 3 states were completed on 17th Nov and elections in Rajasthan are due on 23rd Nov and Telangana on 30th Nov. The official exit polls and results may influence the market sentiments sharply. Stay alert and stay light.

A market veteran says: There will be many SME IPOs before elections results. Since, promoters issue liberal bonus shares before their IPOs, the equity gets bloated but earnings don’t jump in the same proportion. SMEs which reported H1 EPS of only Rs.1-2 should be avoided because any headwind can erode such nominal profits. Many cheap stocks are likely to remain cheap as valuations of most of the SME stocks are highly over stretched. It is safer to buy at higher price if a company shows sharp improvement in H2.

Indraprastha Medical Corporation from the Trade 2 Trade group for about a year is likely to be shifted to the normal equity segment shortly. Stock is likely to spurt after completion of the ongoing short consolidation phase. Buy.

Canara Bank notched 40% higher Q2 EPS of Rs.20.9 and 54% higher H1 EPS of Rs.41.5, which may lead to FY24 EPS of Rs.85+ from Rs.62 y-o-y. FIIs and funds have bought large chunks of its shares. Add.

Shilp Gravures notched Q2 EPS of Rs.6.3, which may lead to FY24 EPS of Rs.20+ from Rs.12.7 y-o-y. Add for 30% gains.

RPP Infra Projects bags orders of Rs.133.5 cr. taking its order book to Rs.2500 cr. It notched 844% higher Q2 EPS of Rs.4.4 and 417% higher H1 EPS of Rs.7.3 y-o-y, which may lead to FY24 EPS of Rs.17+ from Rs.7.7 in FY23. Buy for 30% gains.

JSW Infrastructure to develop an all-weather, deep-water, greenfield port at Keni, Karnataka, on a private partnership basis for Rs.4119 cr. Add for the long term.

Pennar Industries bags orders worth Rs.669 cr. across its various business verticals. Buy.

IIFL Securities notched 95% higher Q2 EPS of Rs.3.5 and 87% higher H1 EPS of Rs.6, which may lead to FY24 EPS of Rs.12+ from Rs.8.1 y-o-y. It has a net surplus of Rs.5500+ cr. Add for 30% gains.

Karur Vysys Bank notched 51% higher Q2 EPS of Rs.4.7 and 54% higher H1 EPS of Rs.9.2, which may lead to FY24 EPS of Rs.20+. Add for hefty gains.

International Conveyors notched 227% higher Q2 EPS of Rs.3.6 and 176% higher H1 EPS of Rs.5.8, which may lead to FY24 EPS of Rs.12+. Buy.

Manappuram Finance notched 38% higher Q2 EPS of Rs.6.6 and 52% higher H1 EPS of Rs.12.5, which may lead to FY24 EPS of Rs.24 as against FY23 EPS of Rs.17.7. Buy for 35% gains.

Natco Pharma notched 536% higher Q2 EPS of Rs.20.6 and 112% higher H1 EPS of Rs.43.9, which may lead to FY24 EPS of Rs.80 as against FY23 EPS of Rs.39.2. Add for 35% gains. 

To diversify borrowings, REC to launch $300 mn Yen Bond in Tokyo in the next two weeks. Add for the long term.

Grasim Industries Q2FY24 NP rose 15% to Rs.1164 cr. on 10% higher revenue. It plans a capex of Rs.5029 cr. in FY24. Add on dips.

GAIL has done the world’s first ship-to-ship LNG transfer to save shipping costs. A big positive. Add.

BPCL plans to expand its fuel retail network by two-thirds. A big positive. Add.

ONGC to start oil production from deep-sea projects in the KG Basin, which will help reverse years of declining output. Accumulate.

Coal Ministry has set a production target of 14 MMT in the next three years. Coal India can be a big beneficiary. Buy.

Shyam Metalic Q2FY24 consolidated NP grew fourfold to Rs.482 cr. Add.

Signature Global plans to invest Rs.2500 cr. on residential projects on its land in Gurugram. Add in small lots.

Indiabulls Housing posted excellent Q2 results with all verticals faring better. Its DER is improving fast and net-worth is growing. Add for hefty gains.

Ashok Leyland has received booking of 10,000 battery-driven light trucks and has unveiled the two new e-LCVs in Chennai. Add for the long term.

The second interim dividend of Pearl Global and the record date to split shares is due soon. The demand for its products is upbeat. Add.

UPL’s Q2 revenues fell sharply across geographies but feels that recovery is around the corner. Hold.

RBI has barred Bajaj Finance from lending in two products but it does not expect a big slowdown in business. It may be prudent to exit and wait for the dust to settle. Sell.

The MSCI rejig has resulted in Suzlon being included in its index. Add for hefty gains.

Elgi Rubber posted excellent Q2 results as it notched 200% higher EPS of Rs. 2.04 from Rs.1.02 y-o-y. Add.

Anand Rathi Wealth’s Q2 EPS rose to Rs.13.81 on the back of growing clientele. An interim dividend of Rs.5 per share was declared. Add.

Ashok Buildcon has a strong order book of Rs.18,000 cr. with railway projects contributing half the total orders. Add for the long term.

Deepak Nitrite is reportedly faring very well. It is available at nearly half of its lifetime high. Add.

Vedanta is being recommended by many analysts as it plans to split into multiple listed entities. Risk bearing investors may add.

JSW Infra bags the Karnataka Port deal to develop a greenfield port to serve all industries. Add for hefty gains.

QMS Medical notched 83.66% higher H1 EPS of Rs.2.81 YoY as profit zoomed 118% to Rs.5.02 cr. from Rs.2.30 cr. YoY. The profit margin rose 476 bps to 9.18% YoY. Co. to raise equity through preferential/QIP/right issue etc. for acquisition of Saarathi Healthcare and Prometheus Healthcare. Add.

Indo Amines’ Q2 PAT grew 130% to Rs.12.91 cr. from Rs.5.61 cr. The promoters hold 67%, Santosh Khemka hold 1.02 and Sangeetha S. holds 3.53%. Stock may cross its 52-week high of Rs.140. Add.

Gujarat Pipavav Port Q2 profit grew 52% to Rs.10.77 cr. from Rs.7 cr. YoY. An interim dividend of 36% was declared. Mutual funds and Insurance cos. hold 21.24% and FPIs hold 20.12%. Add.

International Conveyors Q2FY24 PAT grew 217% to Rs.22.90 cr. from Rs.7.22 cr. in Q2FY23, which may lead to FY24 EPS of Rs.14. It holds 1,43,816 shares of BSE Ltd. and at CMP of BSE its market value is Rs.35 cr. The promoters hold 71% and 6 HNIs hold 6.01% stake. Add for 30% gains.

Mafatlal Industries’ Q2FY24 NP rose 141% to Rs.20.93 cr. from Rs.8.67 cr. in Q2FY23. It has huge land bank and NOCIL shares worth Rs.600 cr. Keep it on your radar.

Conart Engineers’ Q2 NP grew 492% to Rs.77 lakh from Rs.13 lakh in QoQ. With an equity base of Rs.3 cr. and reserves of Rs.23.23 cr., its BV works out to Rs.84. Reputed HNI Mahendra Girdharilal and others hold 4.78% stake. Add for 30% gains.

Munjal Auto, a Hero group co. posted 97% higher Q2 NP at Rs.14.87 cr. from Rs.7.53 cr. YoY. It has an equity base of Rs.20 cr. and reserves of Rs.364 cr. The promoters hold 74.81% stake. Add for decent gains.

Ruchira Paper is reducing its debt continuously. Its stock is trading at a P/E of 6x on FY24E. Add for 35% gains in the long term.

Rite Zone Chemcon has an asset light business model and plans to enter the B2C segment. It is trading at a P/E of 27.2x from the industry average of 32x. It has a DER of 0.06x. Add for hefty gains.

Hitech Pipes reported excellent Q1FY24 results and promoters have increased their stake. Add.

Sprayking Agro was battling the income tax department over allegations but the IT Tribunal has ruled in its favor. Thus, it is no longer liable for Rs.11.56 cr. Add.

Shreeji Translogistics Q2FY24 PAT rose 67% YoY to Rs.4.85 cr. and EBITDA grew 43.06% YoY to Rs.8.21 cr. It added courier cargo services under bonded trucking division for one of its esteemed clients DHL Express. Buy.

Integra Essentia Q2FY24 PAT grew 248% YoY to Rs.7.53 cr. and EBITDA rose 420.98% to Rs.11 cr. Its EBITDA margin rose 116 bps to 14.71%. On 17th Nov, it recorded a combined trading volume of 3.4 cr. Add.

Money Times Talk is part of 'Money Times' Publication.

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