2 Stocks with Good Fundamentals to Add in Your Portfolio

  • Stock Market Analysis
  • Editors Pick

Benchmark equity indices reversed their falling streak on November 25. The BSE Sensex jumped 454.10 points or 0.78% to settle at 58,795.09, whereas NSE Nifty soared 121.20 points or 0.70% to close at 17,536.25. Sensex was pushed forward by Reliance Industries Ltd (NS: RELI ) which remained the top gainer with 6.4% followed by Infosys (NS: INFY ), ITC (NS: ITC ), and Tech Mahindra (NS: TEML ). Among the sectoral indices, IT, pharma, realty, and FMCG stocks ended in the green. Those who closed in red were banks and auto sector stocks. In the present volatile markets, we shortlisted two stocks with decent return potential in the short to medium term.

1. Brigade Enterprises (NS: BRIG ) Ltd

Brigade Enterprises Limited operates as a real estate development company constructing residential, commercial, and hospitality properties. Life-time high sales volume growth. Solid traction of newly launched projects along with ongoing projects provides a strong impetus to future growth. The company has a launch pipeline of 1.43 msf. Apart from it, projects worth ~2 msf are slated to get the nod for launch in the next quarter. It should boost the top line volume in the future in addition to traction in ongoing projects and 27 msf land bank. The company’s commercial segment is exhibiting steady growth as footfall in malls and hotels increases. Brigade’s lease rental has shown a rising trend supported by additional lease revenue from Brigade Tech Garden Phase 2. It's commercial leasing vertical for offices remains stable with more than 99% collections. The active leasing pipeline of over 1 msf is expected to grow gradually with the economy resuming normalcy. Recovery in the residential vertical, debt reduction, pickup in commercial leasing, recovery in retail and hospitality augurs well for the company. BEL has a comfortable debt-equity and sufficient liquidity from operational commercial assets.
Brigade

For the six months ended 30 September 2021, BEL’s revenue jumped to Rs 11.35 billion from Rs 5.14 billion in the year-ago period. Real Estate segment revenue increased to Rs 8.4 billion from Rs 3.4 billion in the six months ended September 2020. Leasing vertical’s revenue grew 56% to Rs 2.46 billion. Its net loss declined 60% to Rs 280.6 million during the comparable period. FIIs have marginally increased their holding in September 2021 quarter.

The company looks good based on key technical indicators such as RSI and 10-day/20-day/30-day/50-day/100-day/200-day EMA barring MACD. The stock returned 127.9% in a year, doubled in year-to-date, 87.2% in six months, and 7.2% in a month. The scrip trades at a 5.5% discount to its 52-week high of Rs 528.8.

2. Aegis Logistics Ltd (NS: AEGS )

Aegis Logistics Limited is a distributor of Liquefied Petroleum Gas (or LPG) and provides logistics and terminal services in the oil, gas, and chemicals sectors. The company also manufactures and distributes oleochemicals and kerosene oil and provides chemical storage facilities. Recently India Ratings and Research affirmed long-term issuer rating with a ‘positive outlook. Aegis’s joint venture with Royal Vopak N.V. in FY2022 should magnify the company’s scale of operations in near future. Optimization of capital structure and expansion in EBITDA resulting from yesteryear’s Capex augurs well for ALL’s growth ahead. Technavio’s latest research report on India’s latest third-party logistics market points out that the introduction of tax reforms by the Government and other initiatives for third-party logistics is likely to fuel that market’s growth henceforth. Aegis Logistics is the prominent player in this market is poised to gain. The company’s EBITDA of the gas and liquid segment is expected to grow at a faster rate driven by the recovery of demand in Autogas and restaurants.
 
ALL

In September 2021 quarter, ALL reported a consolidated net profit of Rs 94.40 crore, as against a net profit of Rs 56.96 crore in Q2FY2021. It represents a 65.7% year-on-year rise. Its consolidated revenue remained at Rs 635.24 crore in the quarter as against Rs 650.36 crore in Q2FY2021. Aegis’s revenue CAGR for a 5-year period stood at 15%, whereas the net income CAGR remained at 24% during the same period. However, its return on equity is in the low double-digit.

Notably, promoters and FIIs/FPIs have marginally raised their holding in September 2021 quarter. The scrip appears reasonably valued among its peer group. The scrip appears attractive based on important technical parameters such as RSI, MACD, 10-day/20-day/30-day/50-day EMA. The scrip’s yearly, year-to-date, six-monthly return is in the negative zone. However, it delivered 8.6% in the month, 14% in the last five days, and was up a solid 16.6% on November 25. The scrip is trading at a 39.2% discount to its 52-week high of Rs 388.    

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  • Neel Jani @Neel Jani
    Brigade - Avg. 5 yr ROE of 6% and RoCE of 8%. Are you sure about the fundamentals because I don't think so.
    Like 4
    • Raja Sekhar Velisetti @Raja Sekhar Velisetti
      @Neel Jani roe & roce is not correct metric for some of the real estate businesses. For clear info on these %s check sunteck realty management video on omkara capital's yt channel. It is very useful and informative.
      Like 1
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      100
  • Kunal Kirtishahi @Kunal Kirtishahi
    I am new in this market can I do
    Like 1
  • Mandeep Anand @Mandeep Anand
    sir your view on bombay dyeing buy price 99
    Like 0
  • Bikesh Kumar @Bikesh Kumar
    Sir..... Swing Trade k liye stock recommend kijiyega
    Like 0
    • Sameer Padole/Investing.com @Sameer Padole/Investing.com
      Like 0
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      100
  • Dilip Bhandari @Dilip Bhandari
    Sir Your recommmended stocks i notice alwayse on top out at higher lavel , Could you advise before or bottom price ? I donnt think so
    Like 0

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