2 Small Cap Stocks Likely to Fly High

  • Stock Market Analysis

Nifty and BSE Sensex 30 are trading at their all-time highs. Nifty witnessed a fresh lifetime intraday high of 16,146.90, whereas, for Sensex, the all-time intraday high peak was 53,887.98. The corporate earnings season has started, and so far, it has been in line with market expectations. Apart from it, easing restrictions across the country barring covid-19 hotspots improves overall economic activities. RBI is also expected to keep key rates untouched in its monetary policy review on August 6. The June 2021 figure for vital macroeconomic indicators raises optimism in the environment. All these augurs well for the stocks markets. In line with the benchmark indices, the mid-cap and small-cap indices too are at record high levels. The NIFTY Smallcap 100 index is up 49.4% year-to-August 3. The index is in green on a one-week, one month, three months, six months, and one-year basis. Real estate stocks have done well in the recent past, riding on the prevailing sentiments. We have picked up one real estate stock and one construction engineering company in the small-cap space, which are likely to fly high in short to medium term.

1. Kolte Patil Developers Ltd (NS: KOLT )

Established in 1991, Kolte Patil Developers is a real estate company with a strong presence in Maharashtra's Pune residential market. The company constructed and developed more than 50 projects, including residential complexes, commercial complexes, and IT Parks across Pune, Mumbai, and Bengaluru. Kolte Patil Family Office and Cerestra Ventures—a real estate private equity fund have inked a pact to invest through Winvest, a build PropTech platform. Eligible investors will likely benefit from a distinct asset portfolio and hassle-free exit opportunities through the joint ownership model through this platform. The Pune-based real estate company has signed a deal with Planet Smart City to form a joint venture to develop 15,000 housing units. The JV will be involved in developing aspirational housing schemes in Bengaluru, Mumbai, and Pune. Bengaluru and Pune are major IT hubs in India. IT companies have so far remained immune to the pandemic economic woes. Kolte Patil's top line is expected to grow at a higher rate being a listed real estate player with a dominant presence in these areas.

Kolte-Patil Developers' net profit was Rs 21.80 crore in Q4FY2021 compared with a net loss of Rs 2.18 crore in Q4FY2020. Its net sales jumped 33.5% to Rs 296.1 crore in Q4FY2021 against Rs 221.74 crore during the period under comparison. The scrip delivered 86.8% returns in a year, 4.9% negative returns in six months, 18% in a month, and 5.8% in the last five days. Currently, it is trading at an 8.4% discount to its 52-week high of Rs 285.6.

2. Gayatri Projects Ltd (NS: GAPR )

Gayatri Projects Ltd is a flagship company of Gayatri Group. The group's interests span infrastructure, power, hospitality, real estate, and industry. Established in 1963, the company is an infrastructure company with expertise in constructing and ownership of infrastructure assets. Gayatri Projects has a presence in the Engineering Procurement and Construction (or EPC) construction of road, irrigation, and industrial projects across India. The company reduced its long-term debt by 25% in FY2021 to Rs 519.2 crore from Rs 689.6 crore in its previous year. It is also considering raising funds by issuing equity shares and convertible debentures to reduce its debt obligations further. Gayatri Projects mentioned its Q4FY2021 conference call regarding the tight liquidity situation and cash flow mismatch due to delays in payments from the state governments. However, as the covid-19 situation improves, it should see more cash inflows going forward. The Purvanchal Expressway is nearing completion among the key projects, while the Mumbai Nagpur Expressway project execution pace is maintained. Its projects in UP are on track, and revenue booking has started in some districts of the UP Jal Jeevan Mission project.

In Q4FY2021, its revenue jumped 49% year-on-year to Rs 1,360 crore, EBITDA 105% to Rs 110.9 crore, and profit after tax from Rs 55.6 crore loss Q4FY2020 to Rs 25.1 crore profit in the corresponding quarter of fiscal 2021. The stock gained 222.6% in a year, 6.8% in six months, 65.5% in a month, and 12% in the last five days. Presently, it is trading at very close to its 52-week high.

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  • Sameer Padole/Investing.com @Sameer Padole/Investing.com
    Both these stocks are up 25% -30% from the article date.
    Like 0
  • nikunj patel @nikunj patel
    idiotic analysis of kolte patil.
    Like 0
  • Prabhu Sundar @Prabhu Sundar
    Waste of reading your article. Gayathri project down 25% after youre Article. No target nothing you have mentioned are you copy pasting this content somewhere ?
    Like 1
  • Chirag Prajapati @Chirag Prajapati
    down 10% gayatri projects?? how come
    Like 0
  • Prabhu Sundar @Prabhu Sundar
    Whats the return period any suggestion sir ?
    Like 0
  • ravindra walunj @ravindra walunj
    sir both of share up or down today
    Like 0
    • Babu Yadav @Babu Yadav
      gir gaye dono 3 %
      Like 0
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  • MOSTAFA AJJOUJ @MOSTAFA AJJOUJ
    VENDRE AJJOUJ MOSTAFA
    Like 1

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