Astral - 4QFY22 Result Update - Multiple Avenues of Revenues to Unfold

 

       Astral reported a healthy revenue of Rs13.9bn in 4QFY22 (up 23.3% YoY and 26.5% QoQ) vs. our estimate of Rs12.9bn. Plastic revenue increased by 22.3% YoY to Rs10.8bn, while Adhesive revenue jumped by 27% YoY to Rs3.1bn. Volume of Plastic segment rose by 11% YoY to 47,211MT, while realization stood at Rs230/kg, up 7.4% YoY. EBITDA fell by 14.8% YoY (up 9.7% QoQ) to Rs2.2bn (in line with our estimate of Rs2.2bn), while EBITDA margin dipped by 700bps YoY to 15.6%, due to the higher RM cost (+39% YoY). EBITDA margin of Plastic segment declined by 610bps YoY to 18.5%, while Adhesive business’ margin fell by 630bps YoY to 10.8%. PAT came in at Rs1.46bn, down 17.3% YoY (up 14.2% QoQ), in line with our estimate of Rs1.45bn. For FY23E/FY24E, we lower our revenue estimates by 1%/2%, despite assuming an additional revenue from the newer businesses, mainly due to a lower realization of Pipes business on a high base. Revenue from newer segments like Water Tanks, Paints and Faucet & Ceramic is likely to increase gradually. We lower our EBITDA margin estimates by 154bps/167bps for FY23E/FY24E, and thus reduce our EBITDA estimates by 9%/10% and PAT estimates by 11%/10% for FY23E/FY24E. For FY22, Astral reported 21% YoY growth in PAT at Rs4.9bn, while revenue rose by 37% YoY to Rs43.4bn. 

In view of the strong all-round growth ahead, rising market share, revival in infrastructure and real estate activities, foray into new segments, it may be considered for buying , with a revised Target Price of Rs2,215 (from Rs2,840 earlier), valuing the stock at a revised target P/E of 65x FY24E earnings. 

Revenue to Double in Next 5 Years; Major Capex to Complete by FY23 

Astral expects its major capex to be completed by FY23 and post which, there will be a maintenance capex of Rs400-500mn every year. Construction activity of its adhesive plant in the chemical zone of Dahej (Gujarat) is on in full swing and the plant will be ready by FY23-end. The company has launched various products in the Adhesive & Sealants segment under a different chemistry, whereby revenue is expected to double in 5 years with the existing products. Astral has a market share of 9.5% in Pipes business. The additional 2 new pipe plants at Sangli and Aurangabad will increase its market share in Maharashtra and South India markets over the next 5 years. We expect the newly undertaken businesses like Water Tanks, Faucet, Sanitaryware, Paints, and Drain Pro to contribute Rs15bn revenue over the next 5 years.  

Outlook & Valuation  

We believe Astral would continue with its growth trajectory led by a) leadership position in CPVC market, b) opportunities in infra pipes segment, c) government’s strong emphasis on infrastructure and housing, d) strong growth potential of Adhesive business after restructuring of its distribution network and, e) new segments. We believe the company’s premium valuation will sustain, going forward, led by the leading position in CPVC pipes segment, continued focus on innovative and high-margin products and restructuring of its Adhesive business. We expect the company to report revenue and earnings CAGR of 11% and 18% respectively, over FY22-FY24E. Factoring the strong all-round growth, rising market share, revival in infrastructure and real estate activities, foray into new segments, it may be considered for buying , with a revised Target Price of Rs2,215 (from Rs2,840 earlier), valuing the stock at a revised target P/E of 65x (earlier 75x) FY24E earnings.

Adani Wilmar - IPO - A Fortune of Edible Oil

Adani Wilmar - IPO - A Fortune of Edible Oil

 About the Company   

Adani Wilmar (AWL) is a JV between Adani Enterprises and Wilmar International, which offers most of the essential kitchen commodities for Indian consumers, including edible oil, wheat flour, rice, pulses, and sugar. The company’s business is categorized into 1) Edible Oil (82% of revenue): AWL is the largest player in branded edible oil, with 25% of India’s refining capacity, and has 2x market share of the next competitor. 2) Packaged Food and FMCG (5%): It ranks among the top 3 players in foods in India. 3) Industry Essentials (13%): It ranks first and is the world’s largest castor oil player, most of which is exported to Europe, the US and China. AWL produces 32% of the country’s stearic acid requirement, 23% of glycerine requirement and 9% of soap noodles requirement. It operates in 28 states and 8 UTs with 10 crushing units and 19 refineries, and the business spans to 1.6mn retail outlets. The company’s “Fortune” flagship brand is the largest-selling edible oil brand in India. Rural population contributes to 30%-35% of the edible oil share. Recently, AWL has focused on value-added products and has launched edible oil products, rice bran health oil, fortified foods, khichdi etc. The company has strong raw material sourcing capabilities and was India’s largest importer of crude edible oil as of FY21. AWL’s edible oil refinery in Mundra is one of the largest single-location refineries in India with a capacity of 5,000MT per day. In addition to the 22 plants, the company also used 36 leased tolling units as of Sept’21 for additional manufacturing capacities. The IPO’s price band is fixed at Rs218-230 per share, raising Rs36bn (at a higher band) with the fresh issue. The objective of the issue is to fund the capex of existing manufacturing facilities and develop new manufacturing facilities. The company also plans to repay its borrowings and fund strategic acquisitions.   

Financials in Brief  

AWL has been mostly resilient to the fallouts from the Covid pandemic. Despite a dip in the EBITDA margin from 4.4% in FY20 to 3.6% in FY21, the company reported a 62% YoY jump in PAT at Rs6.6bn, led by the saving in interest cost, which also helped to improve the net margin to 1.8% in FY21, from 1.4% in FY20. Debt-to-equity improved from 0.9x in FY20 to 0.6x in FY21. For 1HFY22, its revenue jumped by 54% YoY to Rs248bn, with an EBITDA of Rs8bn (up 23% YoY) and PAT of Rs3.3bn (up 36% YoY). 

Our View: SUBSCRIBE  

On FY22 annualized financials, the IPO is valued at 19x EV/EBITDA, 0.6x EV/sales and 44.6x P/E. On FY22 annualized financials, the IPO is valued at 19x EV/EBITDA, 0.6x EV/sales and 44.6x P/E. The IPO is available at ~53x TTM PE vs. the industry average of 67x TTM PE, which is a discount of ~21%. AWL is the largest player in branded edible oil, with 25% of India’s refining capacity, and has 2x market share of the next competitor. The company’s market share increased from 17% in FY20 to 18.3% in FY21, and it believes that there is great opportunity to increase it further on the back of a strong brand equity and fragmented nature of the branded market. AWL ranks #1 in large categories of soya oil & mustard oil. The company believes that a player has to be present in all types of oils that the country consumes and offer multiple SKUs across the price spectrum. Currently, its export business comprises of 3 portfolios namely food (~Rs4bn revenue), oleochemicals (~Rs15bn) and castor oil (~Rs25bn), and it looks to add more products to exports, going ahead. India would consume more value-added functional products as people are becoming aware of health issues. AWL continues to focus on sustainability and with a professional and experienced board, it looks to grow over the years. In view of the differentiated product portfolio, leading market position and extensive distribution network, decent financials, likely margin improvement from current level and valuation comfort compared to peers, we recommend SUBSCRIBE to the issue. 

APL Apollo Tubes - 3QFY22 Result Update - Healthy Volume and Better Product Mix to Aid Margins

 

APL Apollo Tubes - 3QFY22 Result Update - Healthy Volume and Better Product Mix to Aid Margins

APL Apollo Tubes (APAT) has delivered a strong operating performance, despite volume decline, beating our estimate on all fronts. Revenue grew by 24% YoY (up 5% QoQ) to Rs32.3bn vs our expectation of Rs25.3bn on the back of better realisation of Rs77,569/ton (up 51% YoY and up 19% QoQ) despite volume de-growth of 17% YoY and 6% QoQ. The company recorded EBITDA/tonne of Rs5,023 vs. our estimate of Rs4,157bn. Its EBITDA margin contracted by 266bps YoY and 94bps QoQ to 6.3% vs. our estimate of 6.6%, due to the lag effect of commodity cost inflation pass-on to consumers and higher RM prices. PAT stood at Rs1.2bn (down 12% YoY and down 12% QoQ), 29% above our estimate. The management’s current plan of capacity expansion by 1.5mnT at Raipur by FY22-end and a full ramp-up in FY23, and the focus to increase the share of value-added products would aid the company’s margins, going forward. 

In view of the strong products basket, improving volume traction from value added products, healthy order book, likely margin expansion from current level, introduction of new high margin products from Raipur plant and improving return ratios, it  BUY rating on the stock, with an unrevised Target Price of Rs1,100. 

Healthy Demand Outlook; Margins to Expand 

We expect the demand for structural steel pipes and newer framed structures in various projects would keep rising over the next decade. Moreover, the company’s new product launches in various applications with strength would provide comfort to the end user to increase its usage in various projects like hospitals, new plant & projects and office structures. APAT’s ongoing projects of a 2mn sqft hospital and a 0.1mn sqft oxygen plant in Delhi have proved its efficiency in terms of 20% less steel consumption and 10% project cost saving. This would establish it to gain market share and win new orders from various industries, going forward. The company aims for a sizable volume traction in its high-margin tricoat segment and stable volume in the low-margin general structure, resulting into superior mix and leading to an expansion in overall margins. Moreover, its Raipur facility would launch all the value added products i.e. Apollo Column, Coated tubes and Coated products in FY23, which would help volume growth and margin expansion going ahead. Thus, we expect its EBITDA margin to expand to 9.2% in FY24E, from the current 6.3%.  

Outlook & Valuation 

IAPAT’s estimated volume to witness 9% CAGR over FY21-FY24E. Considering the lower volume and subdued financial performance in 3QFY22, we lower our revenue/EBITDA/PAT estimates by 2%/12%/15%, for FY22E. Factoring the company’s capacity expansion plan at Raipur, we raise our revenue/PAT estimates by 3%/4% for FY23E and broadly maintain it for FY24E. In view of the expected healthy volume growth ahead, better product mix, improved earnings visibility, new margin territory and return ratios of 20%, hence , The  BUY rating on APAT and maintain the Target Price to Rs1,100, valuing the stock at 30x FY24E EPS. 

As on 28th-Jan2022,  Apl Apollo Tubes Ltd has provided 78%return in last 1 year .

Next Read : Devyani International Ltd. - IPO

Devyani International Ltd. - IPO

 Devyani International Ltd. - IPO - Strong Franchise with Wide Reach

About the Company   

Devyani International Ltd. (DIL), incorporated in 1991, is the largest franchisee of Yum Brands Inc. (Yum). It is one of the largest quick-service restaurant (QSR) chain operators in India with 655 stores across 155 cities as of Mar 31, 2021. Yum operates several fast food brands i.e. Pizza Hut, KFC and Taco Bell. It operates three business verticals namely: (1) core brands (KFC, Pizza Hut and Costa Coffee in India); (2) international business (stores in Nepal and Nigeria); and (3) other businesses (own branded stores namely: Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar). DIL began its relationship with Yum in 1997, when it commenced operations of its first Pizza Hut store in Jaipur. Subsequently, the company continued to expand its operations with both KFC and Pizza Hut franchises. As of June 30, 2021, it was operating 284 KFC stores and 317 Pizza Hut stores in India. Notably, the company collaborates with Yum across various aspects of operations for KFC and Pizza Hut for protection and management of franchisor’s brand apart from product innovation and development, brand strategy and technology initiatives. It also works closely with Yum on advertising, promotion and marketing activities. For Costa Coffee, it enjoys operational flexibility with respect to similar parameters as well as determining menu, ingredients, suppliers and distributors.  

Financials in Brief  

DIL’s financial performance was significantly impacted in FY21 due to business disruptions caused by COVID-19, for which its revenue, EBITDA and PAT recorded negative CAGR of 7%, 16% and 18%, respectively over FY19-FY21. However, the company increased the number of stores from 469 in FY19 to 605 in FY21 under its core brand business i.e. KFC, Pizza Hut and Costa Coffee. Further, its EBITDA margin as on FY21 stood at 15.8%, which is superior compared to key peers like Burger King and Westlife Development. Additionally, its cash flow generation has been impressive with cumulative OCF and FCF of Rs8.2bn and Rs1.8bn, respectively over FY19-FY21.  

Review: May SUBSCRIBE  

The IPO is valued at 62.8x of FY21 EV/EBITDA and 9.9x of FY21 EV/Sales, which look to be reasonable compared to its listed QSR peers and Westlife Development (McDonald’s) and Burger King. Fast food culture under QSR is expected to flourish in India due to increase in working class population and continued urbanization. We note that business model of QSR is quite impressive, as each restaurant franchise starts generating significant RoE at restaurant level once it reaches utilization level of 90%, which bodes well for the long-term investors. Additionally, superior cash flow generation ability of the business offers comfort.

   ''In terms of valuations, the post-issue FY2021 EV/Sales works out -9.9x to (at the upper end of the issue price band), which is low compared to peers (Jubilant Foodworks-15.4x, Burger King India -14.8x, Westlife Development – 10x). Further, Devyani International has a better operating margin compared to Westlife Development & Burger king. We believe this valuation is at reasonable levels. Thus, we recommend a subscribe rating on the issue,'' Angel Broking said in a note.

The quick service restaurant (QSR) company's IPO consists of a fresh issue of ₹440 crore and an offer for sale (OFS) of upto 155.33 million shares by shareholders and promoters.

''Devyani is well placed to benefit from growing industry trends as it has a strong portfolio of highly recognized global brands which cater to a range of customer preferences. The financial performance has been tepid for the company which has further got impacted in FY21 due to the pandemic. However, the company intends to improve its unit performance which would aid better margins. Considering the current market sentiments, investors may subscribe for listing gains,'' Religare Broking said.

Hence, Investors may SUBSCRIBE to the issue.

Investors who wish to subscribe to the Devyani International IPO can bid in a lot of 165 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,850 to get a single lot of Devyani International. The shares will be listed on both BSE as well as the National Stock Exchange (NSE).

The applicants also must note that the cut-off time for UPI mandate confirmation is Monday, August 9, 2021, upto 12:00 pm. If they fail to do so then their application may not be considered.

   Kotak Mahindra Capital Company Ltd, CLSA India Pvt Ltd, Edelweiss Financial Services Ltd, Motilal Oswal Investment Advisors Ltd are the investment bankers to the issue. The proceeds from the issue will be used for repayment of certain or full borrowings of its firm.

Devyani International (DIL) is the largest franchisee of Yum Brands in India and is among the largest chain operators of quick service restaurants (QSR) in India on a non-exclusive basis, and operates 696 stores across 166 cities in India, as of June 30, 2021. Yum! Brands Inc. operates brands such as KFC, Pizza Hut and Taco Bell and has a presence globally with more than 50,000 restaurants in over 150 countries, as of December 31, 2020.

As on 28th Jan 2022 - Devyani International  has provided 35% returns .

Online Survey : 10 stocks which you would like to invest for long term in 2021.

 Hi All , 

Similar to last year, We are conducting an Online Survey of 10 stocks that you would like to invest for the long term in 2021.

Request you to share your responses with fav. stocks. Please share the response details in the comments section of the post.

The survey will be open from 1-Jan-2021 to 3rd-Jan-2021. The survey details will be consolidated and published in the following week.

We will also share the result of the annual performance of stocks identfited 2020 stock survey.

Happy Investing.

Other Reads: Six Months performance of the survey stocks survey 2020

Why You Do Not Need to Worry about Investments in HDFC MF Schemes Post Milind Barve’s Tenure

 

HDFC Mutual Fund on November 16, 2020, informed stock exchanges about the appointment of Navneet Munot as the MD and CEO of the company. Munot will be succeeding Milind Barve, the current and longest-serving CEO and MD, when his term ends on January 31, 2021.

Barve’s current term officially ended on October 31, 2020, and he had expressed his desire to turn down a term extension because he is turning 63 this year. However, he agreed to an extension of term for an additional three months to provide adequate time to identify a suitable successor and ensure smooth transition and functioning of business operations.

Barve who has served as MD of HDFC Mutual Fund (MF) since its inception about two decades ago has played a key role in the growth and success of its business. Over this period, the fund house grew considerably to become one of the largest and most popular in the mutual fund industry.

During his term, the company was listed on stock exchanges, becoming only the second asset management company in India to do so.

HDFC Mutual Fund’s popularity grew leaps and bounds in the minds of investors due to strong performance of its various schemes in the past. Its asset under management now stands at Rs 3.7 trillion (as on October 31, 2020), second only to SBI Mutual Fund.

Should investors in HDFC mutual fund schemes worry about Barve's exit?

Over the past couple of years, numerous HDFC MF schemes that were once popular have been struggling to keep pace with the benchmark and have lagged many category peers. A change in senior management team could prove to be beneficial for the fund house.

Navneet Munot, stepping into the shoes of Barve, brings with him an immense experience of over 25 years in the fund management business. Munot has been the CIO of SBI Mutual Fund for the past 12 years and was previously associated with Aditya Birla Sunlife Mutual Fund as the CIO of Fixed Income and Hybrid Funds.

Munot took charge as CIO of SBI MF in December 2008 when the fund house was adversely impacted following the global financial crisis. He was successful in steering the fund house and its investment process to stability. SBI MF now manages assets worth Rs 4.3 trillion (as on October 31, 2020), the largest in the industry.

During his term, SBI won the mandate to manage funds of EPFO which coupled with decent performance across categories helped it become the largest asset manager. SBI MF became among the first to adopt the environmental, social, and corporate governance (ESG) as well as passive themes of investing during this term.

Munot's entrance in the HDFC team can therefore be seen as a positive development and is not likely to affect the robust investment process and systems that HDFC MF has in place.

Notably, HDFC MF still has star fund managers in Prashant Jain (CIO & ED) and Chirag Setalvad (Senior Fund Manager), known for their superior long-term performance record and high conviction investment bets.

What does it mean for investors in SBI MF schemes?

SBI MF has not yet announced a replacement for Munot, but the fund house seems to be well prepared to deal with his exit. Vinay Tonse, MD and CEO, SBI Funds Management in an address to media said, "The fund management structure at SBI Funds Management will continue to remain the same, as the company over a period of time has built a very capable second line with strong vintage."

What should investors do in the event of change in management?

A change in management team does not warrant any portfolio action. You should only look for alternatives if you find the performance of a fund unsatisfactory over a longer duration, based on qualitative and quantitative parameters.

Apart from the consistent underperformance of the scheme, listed below are the other circumstances when one can consider exiting their equity mutual fund scheme:

• Your investment has grown to the desired corpus
   
• To gradually shift to safer avenues when your financial goal is approaching
   
• During portfolio rebalancing to maintain the desired asset allocation
   
• The fund objective changes and is no longer in congruence with your own objective
   
• The fund risk profile changes and doesn't match your current risk appetite
   
• In case of a financial emergency when you have no other option
   
• You wish to adopt change in investment style (value, growth, blend, aggressive, conservative, etc.)

It is important to understand the investment philosophy of the fund house and investment processes they follow. Only process-driven fund houses can give you consistent performers over the long term.

Furthermore, before making an investment decision, evaluate your investment objective, risk appetite, and investment horizon to select the appropriate scheme based on unbiased research.

Next Read : Teachers Day 2020-Five books from investment gurus every young investor should read

Teachers' Day 2020: Five books from investment gurus every young investor should read

 Teachers' Day 2020: Five books from investment gurus every young investor should read.

The celebrations for Teachers’ Day 2020 is abuzz. While everybody is using this occasion to thank their teachers for their valuable contributions in their life. Besides, there are few investment gurus, who through their books have given invaluable advice to people to help them grow into a successful investor. Certainly, these books would help young investors to understand better the rough and tumble of the stock, currency and commodity markets. Here are five such books from investment gurus that every young investor should read. 

1) "Rich Dad, Poor Dad" by Robert Kiyosaki

One can never grow rich by earning more unless and until he saves more and invests that amount properly. Where you spend your money decides your financial fate. "Rich Dad, Poor Dad" is a book that will teach you the basics of investing, assets, liabilities and how you can make your money work for you. Robert Kiyosaki, who himself has been a seasoned investor has advocated investments that will produce regular income for investors and will help him in achieving financial freedom. This book is a must-read for every young earner who wants to  create an alternative stream of income by making proper investments.

2) "The Intelligent Investor"  by Benjamin Graham

Author of this book Benjamin Graham is considered as the "father of value investing". This book advocates the purchase of stocks that appear cheap relative to its underlying value. This book discusses various ways of managing your investment portfolio. The author has given the example of many companies to illustrate his views. Warren Buffett, the value investing guru has even hailed the book as the best investing book ever written.

3) "The Dhandho Investor" by Mohnish Pabrai

The book will tell you how to create wealth through low–risk, high–return approach. This book has given the example of Patels, a small business community from India, who first began arriving in the United States in the 1970s as refugees with little education and capital and now own over $40 billion in assets in the United States and pay over $725 million a year.  This book tells you to use the techniques used by the Patels in making stock market investment

4)"Think and Grow Rich" by Napoleon Hill

This book conveys important insights into the psychology of success and abundance, and should be considered a priority read given the current time period's emphasis on shock-value entertainment and negative news. The author of this book Napoleon Hill has conducted extensive research based on his association with wealthy individuals during his lifetime and has published 13 principles for success and personal achievement from his observations and research. These include desire, faith, specialized knowledge, organized planning, persistence and the "sixth sense." 

5) "Beating the Street" Peter Lynch

Author of this book Peter Lynch started his carrier as an intern at Fidelity Investments in the mid-60s and became one of the most successful stock market investors and hedge fund managers. By reading this book you can peek into Lynch's mind and thought process in terms of deciding whether to buy or sell a stock. According to Lync, an individual investor can exploit market opportunities better than Wall Street. He has encouraged investors to invest in what they know.

Next Story : CAMS IPO

CAMS IPO

What is CAMS?

Incorporated in 1988, CAMS provides services to both mutual fund companies and investors. It provides services for verification, processing and receipt of non-financial and financial transactions for the BFSI sector, more prominently for the mutual fund industry. It also provides services to investors like consolidated account statement (CAS) generation, changing mandate and more.

The company is currently headquartered in Chennai. 

Few of its subsidiaries include:

• CAMS KRA
• CAMS Insurance Repository Services Ltd.
• Sterling Software Pvt. Ltd.
• CAMS Financial Information Services Pvt. Ltd.

IPO DETAILS

Particulars	Description
IPO Subscription Dates	September 21-23
Listing Date	On or about October 1, 2020
IPO Price Band	Rs 1,229-1,230 per share
Number of shares on offer	1,82,46,600
Face Value	Rs 10 per share
Minimum Bid Quantity	12
Leading Book Managers of the Issue	1) Kotak Mahindra Capital Company Ltd. 2) HDFC Bank Ltd. 3) ICICI Securities Ltd. 4) Nomura Financial Advisory and Securities (India) Private Ltd.

Share Portions Reserved For Different Investor Categories

There are different kinds of investors: retail, institutional, non-institutional who can participate in the IPO. There is some portion reserved for the employees as well.

Employee Reserve Portion	Up to 182,500 Equity Shares
Anchor Investor Portion	Up to 5,419,230 Equity Shares
Net QIB Portion	3,612,820 Equity Shares
Of the net QIB Portion: Mutual Fund Portion	Up to 1,806,410 Equity Shares
Non-institutional Portion	Not less than 2,709,615 Equity Shares
Retail Portion	Not less than 6,322,435 Equity Shares
Equity Shares outstanding prior to and after the IPO	48,786,800 Equity Shares

What is an RTA?

RTA’s aid asset management companies in record maintenance. They also provide services to mutual fund investors as a single-window reference point for all their mutual fund investment-related information.

CAMS IPO Employees Reservation

A discount of ₹122 per Equity Share is being offered Eligible Employee Bidding in the Employee Reservation Portion. up to 182,500 Equity Shares are reserved for employees. Note:

When using UPI as a payment method, the primary account holder in the bank and demat should be the same person. Use of 3rd party UPI ID or 3rd party bank account is not allowed.

When using ASBA, up to 5 CAMS IPO applications can be applied from the same bank that offers the 3rd Party ASBA IPO application.

HUF and Minors can only apply using ASBA from the banks that offer the 3rd Party ASBA IPO application. i.e. SBI, Axis bank. 

IIFL: Subscribe
The brokerage said at the upper limit of the price band, the issue is priced at 35 times FY20 EPS, which is a 10-15 per cent discount to listed AMCs, exchanges and depositories. It expects the stock to trade in-line with other comparables and further re-rate.

YES Securities: Subscribe

YES Securities values the issue at 26 times FY22 P/E and believes it is reasonable.

The brokerage said that the given CAMS would be a direct beneficiary of low MF penetration, but the growth would be lower given that fees are generally tiered in nature.

Choice Broking: Subscribe with caution

Based on its conservative estimate, Choice is expecting a 2.7 per cent CAGR rise in the topline growth for the company over FY20-23 to Rs 757.91 crore in FY23. 

It sees Ebitda and PAT to grow at 1.5 per cent and 6.4 per cent, respectively.

Risks to Investors

The 4 Lead Managers associated with the Offer have handled 17 public issues in the past three years out of which 6 issues closed below the issue price on the listing date.

The PE ratio based on diluted EPS for FY 2020 for the Issuer at the upper end of the Price Band is as high as 34.61.

Average cost of acquisition of Equity Shares for the Selling Shareholder namely NSE Investments Limited is Rs 187.86 per Equity Share and the Offer Price at the upper end of the Price Band is Rs 1,230 per Equity Share.

Weighted Average Return on Net Worth for Fiscals 2020, 2019, and 2018 is 31.40%

Next Story : Six Months performance of the survey stocks

Six Months performance of the survey stocks

 

Looking at the six months performance of the survey stocks, it looks like most of them have done well during last 2 quarters from March-2020 to August 2020. The returns percentage are approximated and may vary with actuals.

Sr no	Stock Name	votes	6-M returns in %	Comments
1	RELIANCE	27	138	does not include partly paid shares and dividends
2	HDFCBANK	23	41.46	does not  include dividends
3	TCS	16	40	does not include  dividends
4	DMART	16	27	does not  include dividends
5	BAJAJ FINANCE	15	54	does not  include dividends
6	LARSEN TUBRO	14	42.8	does not  include dividends
7	INFY	13	73.94	does not  include dividends
8	IRCTC	12	39.22	does not  include dividends
9	HDFC	12	18.40	does not  include dividends
10	HDFCAMC	12	16.66	does not  include dividends
11	ICICIBANK	10	32	does not  include dividends
12	BAJAJ FINSERVE	10	53	does not  include dividends
13	ITC	10	36	does not  include dividends
14	SBI	10	33	does not  include dividends
15	KOTAK BANK	10	18.18	does not  include dividends
16	HDFC LIFE	10	72	does not  include dividends
17	MOTHERSON SUMI	< 10	122	does not  include dividends
18	ASHOK LEYLAND	< 10	112	does not  include dividends
19	HUL	< 10	16	does not  include dividends
20	TATA MOTORS	< 10	45	does not  include dividends
21	ASIAN PAINTS	< 10	30	does not  include dividends
22	M&M	< 10	127	does not  include dividends
23	BIOCON	< 10	70	does not  include dividends
24	AXIS BANK	< 10	46	does not  include dividends
25	IGL	< 10	38.66	does not  include dividends
26	BATA	< 10	30	does not  include dividends
27	YES BANK	< 10	-6.66	does not  include dividends
28	ICICI PRU.	< 10	87.88	does not  include dividends
29	HERO MOTORS	< 10	89.88	does not  include dividends
30	NBCC	< 10	93	does not  include dividends
31	ICICI LOMBARD	< 10	34	does not  include dividends
32	KEC INTL	< 10	102	does not  include dividends
33	BRITANNINA	< 10	87	does not  include dividends
34	ADANI SEZ	< 10	71	does not  include dividends

Next Story CAPS IPO

Next Story : Six Months performance of the survey stocks