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Angel Broking Pvt Ltd

Published on 21/09/2021 11:15:00 AM

Buy Amber Enterp. CMP(Rs.)3,152 Target(Rs.)3,943 Upside(%)25%  

Rationale - Amber Enterprises India Ltd. (Amber) is the market leader in the room air conditioners (RAC) outsourced manufacturing space in India.  Amber would outperform the industry due to dominant position in Room AC contract manufacturer, increase in share of business in existing customers and new client additions. Amber plans to increase revenues from components (by increasing product offerings, catering to newer geographies, adding new clients) and exports (already started in the Middle east). In the past 2-3 year, Amber has acquired companies like IL JIN Electronics, Ever and Sidwal Refrigeration Industries, which would help in backward integration and also help the company to foray in different segments like railway, metro and defense. Going forward, we expect healthy profitability on back of foray into the Commercial AC segment, entry into export markets, participation in the PLI scheme.  

 

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SEBI Registration number is INH000000164

Angel Broking Pvt Ltd

Published on 21/09/2021 11:14:45 AM

Buy P I Industries CMP(Rs.)3,245 Target(Rs.)3,950 Upside(%)22%  

Rationale - PI Industries is a leading player in providing Custom synthesis and manufacturing solutions (CSM) to global agrochemical players. The CSM business accounted for over 70% of the company’s revenues in FY21 and is expected to be the key growth driver for the company in future. The company has been increasing its share of high margin CSM business driven by strong relationships with global agrochemical players. PI is leveraging its chemistry skill sets and is looking to diversify its CSM portfolio to electronic chemicals, Pharma API, fluoro chemicals, etc. which will help drive business. PI Industries has announced that they will be acquiring the API business of Indswift labs for a consideration of Rs. 1,500 crores. Indswift labs had clocked revenues of Rs. 850 crore in FY21 and provides PI with an entry into the API business which will help provide the company with an additional lever to drive growth. We rahe the stock a BUY with a price target of Rs. 3950.

 

Please refer disclaimer at https://trade.angelbroking.com/Downloads/ARQ-Disclaimer-Note.pdf 
SEBI Registration number is INH000000164

Angel Broking Pvt Ltd

Published on 21/09/2021 11:14:30 AM

Accumulate Bajaj Electrical CMP(Rs.)1,525 Target(Rs.)1,668 Upside(%)9%  

Rationale - Bajaj Electrical Ltd (BEL) is leading Indian consumer products company engaged in designing, manufacturing and marketing of consumer products(appliances, fans, lighting).BEL is also engaged in EPC business with a focus on power transmission, power distribution and illumination. BEL has leadership position in kitchen appliance segment. We believe strong demand outlook of consumer products and focus on debt reduction (gross debt reduced by 60% in FY21) will lead to an improved RoE and RoCE for BEL, going forward. Going forward, we expect healthy profitability on back of strong brand with leadership position in kitchen appliances, wide distribution network & strengthen product portfolio.

 

Please refer disclaimer at https://trade.angelbroking.com/Downloads/ARQ-Disclaimer-Note.pdf 
SEBI Registration number is INH000000164

Angel Broking Pvt Ltd

Published on 21/09/2021 11:14:13 AM

Buy Sona BLW Precis. CMP(Rs.)566 Target(Rs.)719 Upside(%)27%  

Rationale - Sona BLW  is one of India’s leading automotive technology companies that derives ~40% of its revenues from Battery Electric Vehicles (BEV) and Hybrid Vehicles. It supplies EV differential assemblies and gears, BSG systems and EV traction motors to global customers. ~75% of their income from sale of goods in FY21 came from end-use in the overseas markets . This global BEV segment has been fastest growing and is expected to maintain high growth rates which is positive for Sona BLW.The company’s capabilities have enabled them to gain market share across its products especially for products related to EV/BEV. They also have strong market share ranging from 55-90% for differential gears for PV, CV and tractor OEMs in India. Given the traction in the BEV/Hybrid Vehicle space, we believe that Sona Comstar will continue to command higher multiple which is justified by ~47% earnings CAGR over FY21-24E.

 

Please refer disclaimer at https://trade.angelbroking.com/Downloads/ARQ-Disclaimer-Note.pdf 
SEBI Registration number is INH000000164

Angel Broking Pvt Ltd

Published on 21/09/2021 11:13:56 AM

Buy HDFC Bank CMP(Rs.)1,559 Target(Rs.)1,859 Upside(%)19%  

Rationale - HDFC bank is India’s largest private sector bank with an asset book of Rs. 11.3 lakh crore in FY21 and deposit base of Rs. 13.4 lakh crore. The Bank has a very well spread out book with wholesale constituting ~54% of the asset book while retail accounted for the remaining 46% of the loan book. Q1FY22 numbers were impacted due to the second Covid wave which has led to an increase in GNPA/ NNPA by 15/8bps QoQ to 1.5% and 0.5% of advances. Restructured advances at the end of the quarter stood at 0.8% of advances as compared to 0.6% in Q4FY21. The bank posted NII/PPOP/PAT growth of 8.6%/18.0%/16.1% for the quarter despite higher provisioning on the back of strong loan growth of 14.4% YoY. NIMs for the quarter declined by~10bps sequentially to 4.1% due to interest reversals and change in product mix. The management has indicated that 35-40 days of collections had been lost, but expects healthy recoveries from slippages in 2QFY22 which should lead to lower credit costs going forward. Given best in class asset quality and expected rebound in growth from Q2FY22 we are positive on the bank given reasonable valuations at 3.0xFY23 adjusted book which is at a discount to historical averages. We value the stock at3.7xFY23 adjusted book and arrive at a target price of Rs. 1859.

 

Please refer disclaimer at https://trade.angelbroking.com/Downloads/ARQ-Disclaimer-Note.pdf 
SEBI Registration number is INH000000164

Angel Broking Pvt Ltd

Published on 21/09/2021 11:13:43 AM

Buy Safari Inds.CMP(Rs.)832 Target(Rs.)979 Upside(%)18%  

Rationale - Safari Industries (India) Ltd (SIIL) is amongst the leading luggage players with market share of ~18% market share in the organized sector. Market leader in mass segment & shift from unorganized to organized sectors would benefit SIIL. Over the last three years, the company has outperformed luggage Industries in terms of sales growth.Company has a wide distribution network which would support growth going ahead. Focused product strategy and diversified product portfolio to boost growth. Going forward, we expect SIIL to report strong top-line & Bottom-line growth on the back of strong growth in the organized sector, wide distribution network, strong brand & promoter initiatives.

 

Please refer disclaimer at https://trade.angelbroking.com/Downloads/ARQ-Disclaimer-Note.pdf 
SEBI Registration number is INH000000164

Angel Broking Pvt Ltd

Published on 21/09/2021 11:13:30 AM

Buy Dalmia BharatLtd CMP(Rs.)2,221 Target(Rs.)2,864 Upside(%)29%  

Rationale - Dalmia Bharat (DBL) is among the top four cement manufacturers in the country, with an installed capacity of 30.75 MTPA (48% in the southern region and 52% in the eastern region) as on FY21. DBL is play on ramp-up in volumes owing to its new capacities in East and West.DBL has added ~4.2MTPA capacity in FY21 and is in midst of adding ~8MTPA (~5.4MTPA in FY22E and ~2.6MTPA in FY23E, mostly in East & Murli) which would drive the volume growth in the near future. This augurs well owing to strong region-specific fundamentals.We expect the demand environment to remain strong given the impetus on infrastructure spend. We expect cement volume CAGR of ~15% over FY21-23E on the back of strong demand and capacity absorption.The price hikes taken by DBL would enable it to manage cost pressures while continued free cash generation is likely to aid deleveraging. Considering the strong growth outlook, we believe that DBL deserves to trade at a premium to replacement cost as seen during previous growth spurts.

 

Please refer disclaimer at https://trade.angelbroking.com/Downloads/ARQ-Disclaimer-Note.pdf 
SEBI Registration number is INH000000164

Angel Broking Pvt Ltd

Published on 21/09/2021 11:13:20 AM

Buy AU Small Finance CMP(Rs.)1,105 Target(Rs.)1,520 Upside(%)38%  

Rationale - AU Small Finance Bank is one of the leading small finance banks with AUM of ~Rs. 34,688 Cr. at the end of Q1FY22. AU SFB has a well diversified geographical presence across north, central and western India. Wheels (auto) and SBL-MSME segment accounting for 37% and 39% of the AUM respectively. AU is also looking to scale up its home loans and business banking segment which have good growth potential. Q4FY21 numbers were impacted due to interest reversals of Rs. 660mn and higher employee expenses due to one off ESOP charges. Despite the one offs AU had reported NII/PPOP/PAT growth of 18.2%/18.4%/38.1% respectively in Q4FY21 while GNPA/NNPA ratios stood at 4.3%/2.2% respectively. As per the business update for Q1FY22 gross advances for Q1FY22 has declined by 2% QoQ while deposits registered a growth of 3% QoQ. Collection efficiency remained strong during April/May/June at 95%/94%/114% respectively while GNPA remained stable at Rs. 1503 cr. sequentially. Restructured books also remained stable at 2.0% of books at the end of Q1FY22 (1.8% in Q4FY21). Given stable asset quality, we expect loan growth to pick up in Q2FY22 which should lead to a rerating for the bank. We are positive on Au small FInance Bank and recommend a BUY with a target price of Rs. 1375 (5xFY23 BVPs of Rs. 275).

 

Please refer disclaimer at https://trade.angelbroking.com/Downloads/ARQ-Disclaimer-Note.pdf 
SEBI Registration number is INH000000164

Angel Broking Pvt Ltd

Published on 21/09/2021 11:13:09 AM

Buy Stove Kraft CMP(Rs.)933 Target(Rs.)1,175 Upside(%)26%  

Rationale - Stove Kraft Ltd (SKL) is engaged in the business of manufacturing & selling Kitchen & Home appliances  products like pressure cookers, LPG stoves, non-stick cookware etc. under the brand name of 'Pigeon' and 'Gilma'. In the Pressure Cookers and Cookware segment, over the last two years, the company has outperformed Industry and its peers.   Post Covid, organized players are gaining market share from unorganized players which would benefit the player like SKL.  Going forward, we expect SKL to report healthy top-line & bottom-line growth on the back of new product launches, strong brand name and wide distribution network.

 

Please refer disclaimer at https://trade.angelbroking.com/Downloads/ARQ-Disclaimer-Note.pdf 
SEBI Registration number is INH000000164

Angel Broking Pvt Ltd

Published on 21/09/2021 11:12:59 AM

Buy Larsen & Toubro Infotech CMP(Rs.)5,545 Target(Rs.)6,500 Upside(%)17%  

Rationale - L&T Infotech (LTI) is one of the fastest growing mid cap IT companies in India. IT is part of the L&T group and provides services like ADM, Enterprise solutions, Infrastructure management services etc. The company has a very strong presence to the BFSI & manufacturing verticals which accounts for ~45% and 17.5% of the company’s revenues and are amongst the least impacted verticals due to the shutdown on account of Covid - 19. The company doesn't have a very large exposure to service oriented verticals like travel & Tourism which are amongst the worst impacted due to the Covid – 19 outbreak. LTI has been growing significantly faster than both mid and large cap peers over the past few years on the back of strong deal wins and we expect the out performance to continue for the company. We expect the company to post revenue/EBITDA/PAT growth of 17.9%/20.5%/20.5% between FY20-FY23 given a strong deal pipeline and increased demand for digital solutions.  

 

Please refer disclaimer at https://trade.angelbroking.com/Downloads/ARQ-Disclaimer-Note.pdf 
SEBI Registration number is INH000000164