INDEX OVERVIEW
Nifty 50 (Nov 2020 to Nov 2021)
The world has witnessed a roller coaster ride in 2020 and the world market has deep-dived and recovered well in the latter half of 2020. There have been frequent big events in 2020 and we also saw the distress in global markets due to COVID-19. Nifty is again standing (at 12263) just near its all-time highs. The range for Nifty for the next 12 months could be 10500 to 13750. Dips in the market should be used to buy quality shares and build a strong portfolio. The Indian market has made a strong comeback since crashing in March and is poised to set new highs in 2021 as the worst seems to be over and businesses have started recovering and getting back to normal. Indian markets would still prove to be the most rewarding and one of the top growing economies for investors and hence we could see Nifty touching 13750 levels by November 2021.
Bank Nifty (Nov 2020 to Nov 2021)
Bank Nifty is an under-performing Index (at 26799) as compared to Nifty and other Indices. The Index has the potential to cross its all-time high by the end of 2021. Bank Nifty is expected to reach up to 34600 on the upside and should stay in the positive zone with strong support at 21600.
Nifty Midcap 100 (Nov 2020 to Nov 2021)
Samvat 2077 may belong to Midcaps, which has a lot of firepowers left within. The Nifty Midcap 100 Index (at 17802) has also shown a good V-shaped recovery from the low of March and is expected to touch the 20500 marks by November 2021.
Skipper Ltd (NS:SKIP) Current Price: 48 Target Price: 85
About the Company
Skipper Limited is engaged in the manufacturing of all kinds of Power Transmission line Towers, Monopoles, Telecommunication Towers, and Railway Infrastructure structures. The company is also engaged in EPC Projects in Power Transmission & Distribution, Telecom infra, and Railway Structures in various parts of the country along with other geographies. It has a global presence in countries like America, UK, Germany, Spain, South Africa, UAE, Saudi Arabia, Sri Lanka, Indonesia, Philippines, Malaysia, Australia, etc.
In the recent results of Q2 FY21, the company has shown robust growth and strong revenue performance across all segments like Engineering, Polymer, and Infrastructure. The engineering segment contributes 77%, Polymer Business 12%, and Infrastructure business 11% to the total revenues. The company has Rs. 1,711 crores of the total order book, out of which 91% of the order book comes from the Transmission and Distribution segment. The company is expecting robust business performance in 2nd Half of FY21. Anti-China sentiment and a strong supply chain shall also help companies to capture good markets globally. The company is focusing on growing exports to 50% of total revenues in the next 2 years. Despite the disruptions due to COVID, the company is expecting to clock annual revenue growth of 10% in FY 21 on the back of strong execution of export contracts in H2 FY21 and strong polymer business. The company has also recruited 10% additional manpower to support execution pressure ahead.
Financial Snapshot
Face Value: 1 P/E Ratio: 14.61 Industry P/E: 18.50 Book Value: 66.93 Price to B/V: 0.71
Promote : 71.89% FII/FPI : 8.72% DII : 1.86% Others : 17.53% D/E Ratio : 0.55
Conclusive Remarks
Strong Fundamentals and recent management commentary show the confidence of revival in business and its diversified business model makes Skipper Ltd. a good buying bet for a 1-year time frame with a potential return of 77%. Skipper Ltd. can be bought on any dip up to 40 and a correction in the market can be used to accumulate this script with a target price of 85.
Maithan Alloys Ltd (NS:MAIT) Current Price: 506 Target Price: 750
About the Company
Maithan Alloys Ltd is among India’s leading manufacturers and exporters of niche value-added manganese alloys. The company has emerged as a reputed provider of customized manganese alloys to large and growing steel companies the world over. The company produces Ferro Manganese, Ferro Silicon, and Silicon Manganese which are mainly used in stainless steel, alloy steel, and manganese steel. Maithan Alloys Ltd. is India’s largest Manganese Alloy Producer and Exporter with 20 years of rich experience. The company has manufacturing facilities in Vishakhapatnam, Kalyaneshwari, Byrnihat, and Bankura plan (Under Progress). The company has strong relations with clients like SAIL (NS:SAIL), Jindal Steel and Power, JSW, Jindal Stainless (NS:JIST) Ltd., Arcelor Mittal, Qatar Steel, Tata Steel (NS:TISC), Usha Martin (NS:USBL), Hyundai Steel, Emirates Steel, etc. It gets repeat orders from 75% of its clients hence the company is always in good situation as far as the order book is concerned.
Financial Snapshot
Face Value: 10 P/E Ratio: 7.24 Industry P/E: 6.13 Book Value:444 Price to B/V: 1.15
Promote : 74.99% FII/FPI : 0.88% DII : 1.26% Others : 22.88% D/E Ratio : 0.01
Conclusive Remarks
Strong Fundamentals, niche product portfolio, committed client-base and attractive valuations make Maithan Alloys Ltd. a good buying bet for a 1-year time frame with a potential return of 48%. Maithan Alloys Ltd. can be bought on any dip up to 440 and a correction in the market can be used to accumulate this script with a target price of 750.
Gujarat Alkalis & Chemicals Ltd. (NS:GALK) Current Price: 319 Target Price: 480
About the Company
Gujarat Alkalies and Chemicals Ltd (GACL) is one of the largest producers of Caustic Soda in India with an installed production capacity of 429050 MT as of 31 March 2019. The company has about a 14% share in the domestic Chlor-alkali market. The company's product basket comprises nearly 35 products, including Caustic Soda (Lye Flakes/Prills), Liquid Chlorine Hydrochloric Acid Chloromethanes Hydrogen Peroxide Caustic Potash (Lye and Flakes), Potassium Carbonate Aluminium Chloride Phosphoric Acid Chlorinated Paraffin Poly Aluminium Chloride (various grades) Chloro-Toluene Sodium Chlorate, etc. The company has two units located in Vadodara (Baroda) and Dahej, both in the state of Gujarat. The manufacturing facilities have been accredited with ISO 9001:2000, ISO 14001:1996, and IS 18001:2000 certification for quality management.
The company is associated with various industries viz. Textiles Pulp and Paper Soaps and Detergents Alumina Water Treatment, Petroleum Fertilizers, Pharmaceuticals, Agrochemicals Dyes, Dyes Intermediates, etc. through their products. It has marked its presence across the globe even against stiff international competition by exporting its world-class products to Europe, West Asia, South East Asia, Africa, the Middle East/Far East, SAARC countries, etc. To continue promoting green technology and to meet solar renewable purchase obligations, the company took up a Solar Power Project for 15 MW at the site of Charanka Patan, which was commissioned in a phased manner in June 2018. The company has also taken up the 20 MW Solar Power Project for captive use at the same site.
Financial Snapshot
Face Value: 10 P/E Ratio: 11.38 Industry P/E: 18.98 Book Value: 630 Price to B/V: 0.50
Promote : 46.28 % FII/FPI : 1.48 % DII : 5.66 % Others : 46.58 % D/E Ratio : 0.04
Conclusive Remarks
Being a leading manufacturer of Caustic Soda in India, and having a 14% market share in the Domestic Chlor-Alkali market and having a global presence, Gujarat Alkalies and Chemicals Ltd. have good prospects with the expectation of better results in Q2 FY21 and better execution in H2 FY21. The shares can accumulate on dips of up to 270 percent with a target price of 480 within a 1-year time frame.
Oracle Financial Services Software Ltd (NS:ORCL) Current Price: 3075 Target Price: 4250
About the Company
Oracle Financial Services Software (NS:ORCL) Limited (OFSSL) (erstwhile i-flex solutions) is a world leader in providing IT solutions to the financial services industry and is a majority-owned subsidiary of Oracle Corporation (NYSE:ORCL). OFSSL provides a wide range of technology solutions covering Retail Banking, Corporate Banking, and Payments. The two other smaller business segments of the company comprise of consultancy services business and the business process outsourcing (BPO) services business.
The company has delivered good results considering the pandemic situation in Q2 FY21. Consolidated y-o-y profits increased to 9% and Revenues increased by 3% in Q2 FY21. Improved deal momentum led by the Digital acceleration theme and significant savings on costs due to remote operations could extend the overall earnings momentum significantly hereon. Global leadership in underpenetrated CBS business, unmatched access, superior technology, and integrated six reliable offerings would ensure that OFSS emerges as the most preferred vendor in the segment. The company has earned profits of 872 crores in H1 FY21 against full-year profits of 1462 crores, which means the company has already covered 60% of its FY20 profits in 6 months of FY21.
Financial Snapshot
Face Value: 5 P/E Ratio: 16.54 Industry P/E: 27.27 Book Value: 689 Price to B/V: 4.46
Promote : 73.32% FII/FPI : 12.42% DII : 7.00% Others : 7.25% D/E Ratio : 0.02
Conclusive Remarks
With promising fundamentals, leadership in providing IT solutions, and expectation of robust business performance, OFSS is a good buying candidate and accumulation can be done on ever dips up to 2700, with target price by next Diwali to be 4250 i.e. Potential return of 38% in a year.