Two Fundamentally Good Stocks to Go Long

  • Stock Market Analysis

On September 24, the benchmark Indian equity indices scripted history. The BSE Sensex crossed the 60,000 mark to end the day at 60,048.47, whereas NSE Nifty 50 crossed the 17,850 mark to rest at 17,853.20. Intraday, Sensex touched the day's high of 60,333 and low of 59,946.55. Nifty oscillated between 17,819.40-17,947.65. BSE midcap index declined 1%, while smallcap index eased 0.3%. Among major sectoral indices, auto, IT, and realty indices clocked gains. FMCG, PSU banks, metal, and pharma indices plunged 1-2%. We screen for fundamentally good stocks with the potential to deliver above-average returns in the near to medium term. Two stocks that caught our attention are listed below.

1. Welspun India Ltd (NS: WLSP )

Welspun India is a part of the $ 2.7 billion Welspun Group. The company is one of the largest home textile manufacturers in the world. It offers a broad spectrum of home and technical textile products and flooring solutions. Welspun also manufactures a wide range of home textile products, including towels, bathrobes to sheets, and basic & fashion bedding. The company has recently entered into the carpets flooring solutions business. The rebate of State and Central taxes and Levies (or RoSCTL) rate was extended to March 31, 2024, providing significant relief for the home textile and garment companies. The Central Government's notification in mid-July 2021 augurs well for the home textile and garment companies that derive a sizable chunk of profits through these incentives. Union Cabinet's Rs 10,683 crore production linked incentive (or PLI) scheme covers players producing over 50 man-made fibre garments and fabrics and a handful of technical textile products. Welspun is poised to gain out of it. Niche brand, innovation, and a diversified clientele aid the company to prosper in the future. Rising cotton yarn price—the basic raw material accounting for 50% of expenses, acts as a headwind in the future.

In Q1FY2022, Welspun reported a four-fold year-on-year jump in net profit to Rs 222.9 crore from Rs 53.75 crore in a year-ago quarter. Consolidated total revenue was Rs 2,214.49 crore, up 84.3% compared to Rs 1,201.8 crore in Q1FY2021. In the last five years, the company's revenue CAGR stood at 4%, whereas net profit CAGR was negative 6%. Although promoters' holding remained unchanged in June 2021 quarter, MFs, FIIs/FPIs, and DIIs marginally upped their stake in the company. Major technical indicators such as RSI, MACD, and 20-day/50-day/100-day signal a 'buy on the stock.

2. Cipla (NS: CIPL ) Ltd

Cipla Limited is an Indian multinational pharmaceutical company. The company primarily develops medicines to treat respiratory, cardiovascular disease, arthritis, diabetes, weight control and depression, and other medical conditions. In the first week of September, Cipla wrote National Pharmaceutical Pricing Authority to allow the drugmaker to hike prices of certain respiratory medications. The management remained focussed on four verticals viz. One-India, South Africa & International Markets and Global lung leadership & US generics. Cipla continues to witness strong traction across branded prescription, trade generics, and consumer wellness in India. Its multi-quarter market-beating growth in branded prescription and comprehensive Covid-19 portfolio keeps driving growth in India. In the US, the company continues to expand its market share in the overall Albuterol market. Cipla entered into the top 10 generic companies league in the US by prescriptions in FY2021. The inclusion was unlocking the respiratory franchise, and limited competition launches over the last 2-3 years.

In Q1FY2022, Cipla's consolidated revenue grew 27% year-on-year to Rs 5,504 crore. EBITDA jumped 28% to Rs 1,346 crore in the quarter. Its profit after tax increased 24% year-on-year to Rs 715 crore. Notably, FIIs/FPIs holding went up by 1.57% in June 2021 quarter. DIIs, too upped their stake by 0.65% in the quarter. Vital technical indicators such as RSI, Momentum, MACD, and 20-day/50-day/100-day EMA signal a 'buy on the stock.

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  • sandeep sharma @sandeep sharma
    what about trident sir
    Like 0
  • Sanjeev Rawat @Sanjeev Rawat
    about m&m
    Like 0
  • V P Singh @V P Singh
    look at some other new names. Jublient Ingrevia, Sonablw and Easemytrip.
    Like 2
    • Vinod Kumar @Vinod Kumar
      i have julient ingrevia and sonablw...can add some more in bulk?
      Like 0
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  • umesh sable @umesh sable
    Hi
    Like 0
  • Umashankar Joshi @Umashankar Joshi
    about yes bank & uco bank
    Like 2
    • Prasad Awate @Prasad Awate
      Both bakwaas
      Like 0
    • Janak Panchal @Janak Panchal
      😂😂😂😂 @Prasad Awate
      Like 0
    • V R Kotha @V R Kotha
      @Prasad Awate Like you
      Like 0
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  • Devendra Singh @Devendra Singh
    Please share your view for m&m.
    Like 0
  • Tr Surendhar @Tr Surendhar
    Thank u sir I hold welspun from120 rs, write a article on market sentiments and how institutions work in funding or picking a stock
    Like 3
  • Gautam Art @Gautam Art
    what's your opinion on Glenmark life science share
    Like 2
    • Sameer Padole/Investing.com @Sameer Padole/Investing.com
      @Gautam Art Sir, I had expressed my views earlier. Please check.
      Like 2
    • Ajit Pardeshi @Ajit Pardeshi
      Sameer ji what about yes bank
      Like 0
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  • Ashish Choubey @Ashish Choubey
    what's your opinion on CESC share
    Like 0

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