VALUEGUIDE FEBRUARY 2021 - SHAREKHAN
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ValueGuide
February 2021
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CONTENTS
From the Editor’s Desk EQUITY
Post the weakness in
January, the bulls have
FUNDAMENTALS
made a strong comeback. 3R Stock Idea 09 REGULAR FEATURES
Sensex has comfortably Stock Update 10 Report Card 04
crossed the 50,000 mark
whereas the CNX Nifty is Sector Update 30 Earnings Guide 43
sailing smoothly over the
15,000 mark. The rally was
reignited by the bold and TECHNICALS DERIVATIVES
growth oriented Union Budget. Nifty 33 View 34
The Union Budget surprised the street with the shift in
fiscal policy priorities. Economic growth takes precedence
over fiscal prudence now.
08
ADVISORY DESK DERIVATIVES
MID Trades 38 Derivatives Ideas 38
PMS DESK
ProPrime - Prime Picks 37
CURRENCY
FUNDAMENTALS
USD-INR 35 GBP-INR 35
EUR-INR 35 JPY-INR 35
TECHNICALS
MUTUAL FUND DESK 39
USD-INR 36 GBP-INR 36
EUR-INR 36 JPY-INR 36
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June 2017 2021
FEBRUARY 3 Sharekhan ValueGuide
REPORT CARD EQUITY FUNDAMENTALS
STOCK IDEAS STANDING (AS ON FEBRUARY 03, 2021)
CURRENT PRICE AS ON PRICE 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
COMPANY
RECO 03-FEB-2021 TARGET HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M
Autos
Alicon Castalloy Buy 432 500 449 170 15.7 40.7 48.2 11.8 10.9 13.7 11.2 -9.3
Amara Raja Batteries Buy 956 1060 1025 350 -1.0 21.1 34.3 23.1 -5.1 -2.1 0.7 -0.1
Apollo Tyres Buy 227 290 256 74 20.5 53.7 97.1 40.7 15.5 24.2 47.8 14.2
Ashok Leyland Buy 134 ** 139 34 29.1 60.2 171.3 70.2 23.8 29.4 103.5 38.1
Bajaj Auto Buy 4238 4327 4361 1793 20.3 44.8 42.7 34.0 15.4 17.0 7.0 8.8
Balkrishna Industries Buy 1722 1800 1855 678 3.1 25.4 29.9 53.0 -1.2 1.3 -2.6 24.1
Bosch Buy 16548 18196 16823 7874 24.1 40.3 29.6 18.2 19.0 13.4 -2.8 -4.1
Exide Industries Buy 204 229 209 122 4.1 25.5 31.3 8.5 -0.2 1.4 -1.5 -12.0
GNA Axles Buy 385 410 423 132 34.5 68.9 90.6 56.1 28.9 36.5 42.9 26.7
Hero MotoCorp Buy 3384 4030 3575 1475 11.2 14.0 25.1 37.4 6.6 -7.9 -6.2 11.6
Lumax Auto Technologies Buy 129 148 142 48 5.2 36.4 33.0 15.5 0.9 10.2 -0.3 -6.2
M&M Buy 833 1000 893 246 11.2 39.6 38.2 44.5 6.6 12.8 3.7 17.3
Maruti Suzuki Buy 7588 9000 8400 4002 -1.5 9.1 19.3 5.4 -5.5 -11.8 -10.5 -14.5
Mayur Uniquoters Buy 300 360 331 118 -2.8 18.0 29.2 36.5 -6.9 -4.7 -3.1 10.8
Schaeffler India Buy 4524 5258 4970 3044 -2.7 22.2 24.8 -2.6 -6.7 -1.3 -6.4 -20.9
Sundram Fasteners Buy 601 700 625 249 10.3 36.4 48.5 22.8 5.8 10.2 11.3 -0.3
Suprajit Engineering Buy 210 300 231 100 3.9 18.5 35.2 5.3 -0.4 -4.2 1.4 -14.5
Tata Motors Buy 331 ** 342 64 73.1 143.6 197.1 99.7 65.9 96.9 122.8 62.1
TVS Motor Buy 645 ** 658 240 30.1 36.9 61.5 41.8 24.7 10.7 21.1 15.1
BSE Auto Index 24257 25073 10141 13.9 36.0 45.7 33.3 9.2 9.9 9.3 8.2
Agri/Specialy Chemical
Aarti Industries Buy 1192 1355 1364 662 -7.0 17.0 14.3 23.9 -10.8 -5.4 -14.3 0.6
Atul Limited Buy 6512 7540 7021 3257 0.9 8.5 25.7 34.6 -3.3 -12.3 -5.8 9.3
Coromandel International Buy 784 1000 880 444 -4.5 5.3 0.5 26.8 -8.5 -14.9 -24.6 2.9
Insecticides (India) Buy 495 590 568 207 6.0 9.6 14.8 -8.4 1.6 -11.4 -13.9 -25.6
PI Industries Buy 2251 2740 2544 974 -0.3 -1.3 22.9 45.5 -4.4 -20.2 -7.8 18.1
SRF Limited Buy 5611 6760 6075 2492 -1.3 26.4 47.2 49.8 -5.3 2.1 10.4 21.6
Sudarshan Chemicals Buy 517 615 538 286 6.7 17.3 20.0 10.4 2.3 -5.2 -10.0 -10.4
UPL Buy 558 632 601 240 17.9 39.1 20.9 6.8 13.0 12.4 -9.4 -13.3
Vinati Organics Buy 1209 1550 1418 651 -1.8 5.3 23.0 -40.3 -5.9 -14.9 -7.7 -51.5
Banks & Financials
AU Small Finance Bank Buy 961 1060 1218 366 8.8 23.3 37.9 -8.6 4.3 -0.4 3.4 -25.8
Axis Bank Buy 734 800 766 285 17.4 39.7 71.0 2.6 12.5 12.9 28.3 -16.7
Bajaj Finance Buy 5248 6000 5627 1783 0.6 47.4 62.2 16.1 -3.6 19.2 21.6 -5.7
Bajaj Finserv Buy 9532 10860 9997 3986 7.1 63.8 54.6 -0.2 2.6 32.4 16.0 -19.0
Bank of Baroda Hold 77 ** 93 36 17.2 71.1 65.6 -11.5 12.3 38.3 24.2 -28.2
Bank of India Hold 54 ** 67 30 7.3 37.4 10.6 -17.5 2.9 11.0 -17.0 -33.0
Cholamandalam Investment
Buy 460 520 475 117 3.8 56.8 129.4 38.6 -0.5 26.7 72.0 12.5
and Finance Company
City Union Bank Buy 182 225 239 110 1.9 15.2 55.9 -20.6 -2.3 -6.9 16.9 -35.6
Federal Bank Buy 82 95 94 36 15.7 54.8 56.0 -9.1 10.9 25.1 17.0 -26.2
HDFC Buy 2704 3100 2778 1473 4.8 29.5 52.0 15.3 0.5 4.7 14.0 -6.4
HDFC Bank Buy 1575 1810 1618 739 11.2 25.3 51.3 28.1 6.6 1.2 13.4 4.0
ICICI Bank Buy 622 680 639 269 17.0 42.3 77.3 17.3 12.2 15.0 32.9 -4.8
Indusind Bank Buy 1050 ** 1283 236 16.9 54.8 113.1 -17.5 12.1 25.1 59.8 -33.1
Kotak Mahindra Bank Buy 1852 2130 2027 1000 -5.8 13.6 39.9 9.1 -9.7 -8.2 4.9 -11.5
LIC Housing Finance Hold 448 450 464 186 17.5 51.8 73.7 14.1 12.6 22.7 30.3 -7.4
LT FINANCE HOLDING Buy 93 103 125 43 -4.7 42.4 52.9 -18.9 -8.7 15.0 14.7 -34.2
Max Financial Buy 700 750 752 280 1.6 14.1 29.9 45.0 -2.6 -7.8 -2.6 17.7
Nippon Life India AMC Buy 331 345 453 201 6.2 19.1 26.1 -7.9 1.8 -3.7 -5.5 -25.3
FEBRUARY 2021 4 Sharekhan ValueGuide
EQUITY FUNDAMENTALS REPORT CARD
STOCK IDEAS STANDING (AS ON FEBRUARY 03, 2021)
CURRENT PRICE AS ON PRICE 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
COMPANY
RECO 03-FEB-2021 TARGET HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M
Punjab National Bank Hold 38 ** 59 26 8.0 40.1 17.8 -32.3 3.5 13.3 -11.7 -45.1
RBL Bank Buy 257 ** 336 102 7.1 38.9 52.0 -19.5 2.6 12.2 14.0 -34.7
New Ide
Repco Home Finance a
Buy 256 330 359 91 5.1 29.7 72.5 -22.5 0.8 4.8 29.4 -37.1
SBI Buy 336 460 408 150 19.5 62.2 75.2 9.7 14.6 31.1 31.4 -11.0
Spandana Buy 746 850 1187 404 -3.1 35.7 20.2 -26.4 -7.1 9.6 -9.9 -40.3
BSE Bank Index 39310 41320 18430 10.0 33.0 61.2 11.9 5.4 7.5 20.9 -9.2
Insurance
HDFC Life Buy 688 850 731 339 -1.1 15.7 12.0 20.0 -5.2 -6.5 -16.0 -2.6
ICICI Pru Life Buy 479 584 538 222 -5.1 16.9 5.6 1.8 -9.0 -5.6 -20.8 -17.4
ICICI Lombard Buy 1438 1750 1625 806 -7.2 16.6 6.5 9.7 -11.1 -5.8 -20.1 -10.9
Consumer Goods
Asian Paints Buy 2453 3000 2871 1432 -11.0 13.1 43.1 29.7 -14.6 -8.6 7.3 5.3
Britannia Buy 3517 4200 4015 2101 -1.1 1.4 -7.9 8.8 -5.1 -18.1 -30.9 -11.7
Colgate-Palmolive (India) Buy 1609 1850 1676 1065 2.1 9.0 11.9 18.4 -2.1 -11.9 -16.1 -3.9
Dabur India Buy 525 605 552 385 -3.5 1.2 3.5 4.1 -7.5 -18.2 -22.4 -15.5
Emami Buy 487 570 515 141 14.6 31.0 103.2 61.9 9.8 5.8 52.4 31.4
Godrej Consumer Products Buy 747 850 808 425 -1.5 10.4 7.8 14.0 -5.6 -10.7 -19.1 -7.4
Hindustan Unilever Buy 2233 2790 2614 1756 -8.0 8.2 1.6 3.6 -11.8 -12.6 -23.8 -15.9
ITC Buy 217 265 239 135 1.6 27.7 12.0 0.5 -2.6 3.2 -16.0 -18.4
Jyothy Laboratories Buy 156 188 166 86 5.6 17.4 18.9 1.9 1.2 -5.1 -10.9 -17.3
Marico Buy 416 477 435 234 -0.3 12.0 13.0 35.3 -4.4 -9.5 -15.2 9.8
Nestle India Buy 17155 19055 18821 12589 -6.7 0.9 3.5 4.3 -10.6 -18.4 -22.4 -15.4
Tata Consumer Products Ltd Buy 580 685 635 214 -4.0 17.7 28.9 52.7 -8.0 -4.9 -3.3 23.9
Zydus Wellness Buy 1889 2300 2218 1070 -12.4 8.5 10.9 25.7 -16.0 -12.3 -16.9 2.0
BSE FMCG Index 12437 12895 8491 -2.8 13.3 8.4 7.4 -6.8 -8.4 -18.7 -12.8
IT / IT services
Birlasoft Buy 261 320 282 48 2.7 43.4 113.1 196.9 -1.5 15.9 59.8 141.0
HCL Technologies Buy 960 1250 1074 376 -2.0 17.7 38.6 63.6 -6.1 -4.9 4.0 32.7
Infosys Buy 1286 1650 1393 511 -0.2 17.6 35.4 63.2 -4.3 -5.0 1.5 32.5
New Ide
a
Intellect Design Buy 380 500 502 44 20.3 64.1 136.4 122.5 15.3 32.6 77.3 80.5
L&T Infotech Buy 4310 4800 4500 1208 12.1 41.9 76.1 122.4 7.5 14.7 32.1 80.5
L&T Technology services Buy 2564 3100 2780 995 4.5 48.1 68.9 51.0 0.2 19.7 26.6 22.6
Mastek Limited Buy 1214 1400 1460 170 -1.6 35.1 98.7 171.4 -5.7 9.1 49.0 120.3
Persistent Systems Buy 1663 1770 1739 420 9.5 46.9 75.0 132.3 4.9 18.7 31.2 88.5
Tata Consultancy Services Buy 3199 3590 3345 1504 5.3 20.6 42.2 51.8 0.9 -2.6 6.7 23.2
Tata Elxsi Buy 2877 ** 3050 501 53.1 87.5 207.0 179.1 46.8 51.6 130.2 126.5
Tech Mahindra Buy 982 1100 1081 470 -2.0 18.8 50.4 21.0 -6.0 -4.0 12.8 -1.8
Wipro Buy 433 510 467 160 9.4 26.4 54.2 80.4 4.8 2.2 15.6 46.4
BSE IT Index 25726 27074 10937 2.4 20.9 42.9 60.2 -1.9 -2.3 7.2 30.0
Telecom and New Media
Affle (India) Limited Buy 3787 5000 4173 909 -4.3 43.1 113.3 110.7 -8.3 15.6 59.9 71.0
Bharti Airtel Buy 609 750 623 381 17.7 34.5 10.9 17.3 12.9 8.7 -16.8 -4.8
Info Edge (India) Buy 4809 ** 5876 1580 -0.7 33.3 50.3 62.3 -4.8 7.7 12.7 31.7
Capital goods / Power
Amber Technologies Buy 2742 3170 2794 922 14.3 21.8 58.3 70.8 9.6 -1.5 18.7 38.7
Carborundum Universal Buy 428 540 490 175 6.1 42.0 75.4 29.1 1.7 14.7 31.5 4.8
CESC Buy 634 825 747 366 1.5 10.3 14.0 -11.1 -2.7 -10.9 -14.5 -27.8
Coal India Buy 137 160 186 110 0.0 19.6 6.6 -24.8 -4.1 -3.3 -20.0 -39.0
Cummins India Buy 764 765 799 282 25.4 73.5 90.0 35.2 20.2 40.2 42.5 9.8
FEBRUARY 2021 5 Sharekhan ValueGuide
REPORT CARD EQUITY FUNDAMENTALS
STOCK IDEAS STANDING (AS ON FEBRUARY 03, 2021)
CURRENT PRICE AS ON PRICE 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
COMPANY
RECO 03-FEB-2021 TARGET HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M
Dixon Technologies Buy 15865 ** 18700 2900 15.1 66.1 99.4 233.9 10.3 34.2 49.5 171.0
Finolex Cable Buy 370 450 426 165 4.1 35.0 37.2 -1.8 -0.2 9.1 2.9 -20.3
Greaves Cotton Buy 90 110 147 66 -6.6 34.4 10.5 -32.1 -10.4 8.6 -17.1 -44.9
Honeywell Automation Buy 41840 48200 42840 20142 14.7 41.1 52.1 27.7 10.0 14.0 14.0 3.7
Kalpataru Power Transmission Buy 346 406 462 170 7.8 38.3 50.2 -20.8 3.3 11.7 12.7 -35.7
KEC International Buy 406 435 420 155 7.8 23.5 49.2 21.9 3.4 -0.2 11.9 -1.1
KEI Industries Buy 478 540 547 208 0.4 47.1 33.8 -13.0 -3.8 18.9 0.3 -29.4
NTPC Buy 97 140 119 74 -1.8 14.2 13.4 -13.1 -5.8 -7.7 -14.9 -29.5
Polycab India Buy 1295 1530 1331 572 22.4 37.5 54.3 29.6 17.3 11.1 15.7 5.2
Power Grid Corporation Buy 206 220 210 130 9.6 16.5 15.7 6.2 5.1 -5.8 -13.2 -13.8
Ratnamani Metals and Tubes Buy 1584 1790 1775 716 -3.6 25.3 43.5 23.8 -7.6 1.3 7.6 0.5
Thermax Hold 1015 1350 1285 644 10.3 34.6 38.3 -1.6 5.7 8.8 3.7 -20.1
Triveni Turbine Buy 89 105 100 46 9.6 25.6 40.2 -7.4 5.1 1.5 5.2 -24.8
V-Guard Industries Buy 241 311 255 149 24.4 42.2 47.2 11.6 19.2 14.9 10.4 -9.4
BSE Power Index 2171 2273 1275 3.8 25.0 41.2 14.2 -0.5 1.0 5.9 -7.3
BSE Capital Goods Index 21481 22245 9499 11.7 48.2 66.6 27.4 7.1 19.7 24.9 3.4
Infra / real estate
Ashoka Buildcon Buy 106 125 117 37 14.5 73.1 93.6 -0.6 9.7 39.9 45.2 -19.3
JMC Projects Buy 79 83 102 30 17.2 68.8 69.7 -17.7 12.3 36.4 27.3 -33.2
KNR Constructions Buy 218 367 242 86 -34.6 -13.0 7.4 -22.4 -37.3 -29.7 -19.5 -37.0
Larsen & Toubro Buy 1529 1550 1593 661 16.3 62.7 65.5 18.4 11.5 31.5 24.1 -3.9
PNC Infratech Buy 225 300 278 81 24.5 32.5 68.7 17.4 19.3 7.1 26.5 -4.7
Sadbhav Engineering Buy 64 75 121 23 -0.7 39.0 44.5 -44.9 -4.8 12.3 8.3 -55.2
CNX Infra Index 4017 4114 2073 8.1 28.8 26.8 23.5 3.6 4.1 -4.9 0.2
BSE Real estate Index 2663 2808 1259 6.2 49.6 67.6 9.7 1.8 20.9 25.7 -10.9
Oil & gas
Bharat Petroleum Corporation Buy 415 520 496 252 4.9 18.9 1.5 -13.3 0.6 -3.9 -23.9 -29.7
GAIL (India) Buy 131 155 146 66 2.0 56.6 40.1 9.8 -2.2 26.6 5.0 -10.9
Gujarat Gas Buy 372 500 449 191 -1.5 25.7 20.2 27.4 -5.6 1.6 -9.8 3.4
New Ide
a
Gujarat State Petronet Limited Buy 202 300 250 146 -8.0 7.8 1.5 -17.6 -11.8 -12.8 -23.9 -33.1
Hindustan Petroleum
Buy 225 275 244 155 1.0 20.6 4.8 -2.8 -3.2 -2.5 -21.4 -21.1
Corporation
Indian Oil Corporation Buy 102 115 118 71 8.6 30.7 17.1 -10.5 4.1 5.7 -12.2 -27.4
Indraprastha Gas Limited Buy 546 650 581 285 7.7 34.2 40.5 6.2 3.3 8.4 5.4 -13.8
Mahanagar Gas Buy 1084 1380 1240 666 0.1 32.2 11.8 -9.7 -4.1 6.8 -16.1 -26.7
Oil India Ltd Hold 114 ** 139 66 1.4 35.1 20.8 -11.6 -2.8 9.2 -9.4 -28.3
Petronet LNG Buy 248 300 280 171 -1.9 9.3 0.2 -8.3 -6.0 -11.6 -24.8 -25.6
Reliance Ind Buy 1930 2400 2369 868 -3.0 0.9 -10.3 35.4 -7.0 -18.5 -32.7 9.9
BSE Oil and gas Index 14571 15435 8724 1.1 22.6 10.9 3.7 -3.1 -0.9 -16.8 -15.9
Pharmaceuticals
Abbott India Buy 14439 19425 18569 12500 -7.9 -8.9 -11.8 10.3 -11.7 -26.4 -33.9 -10.5
Aurobindo Pharma Buy 920 1100 1023 281 -4.8 17.7 6.5 85.8 -8.7 -4.9 -20.2 50.8
Biocon Buy 401 470 488 236 -14.2 -2.3 -3.0 38.3 -17.8 -21.0 -27.3 12.2
Cadila Healthcare Buy 478 560 509 213 -1.6 8.9 18.7 81.1 -5.7 -12.0 -11.0 47.0
Cipla Buy 849 950 879 357 2.0 8.7 18.9 89.3 -2.2 -12.2 -10.8 53.6
Divi's Labs Buy 3686 4500 3913 1633 -4.6 15.4 37.0 87.9 -8.5 -6.7 2.8 52.5
DR Reddy's Buy 4651 6500 5515 2498 -11.8 -5.8 0.4 43.4 -15.4 -23.8 -24.7 16.4
Granules Buy 344 475 438 115 -4.6 -8.5 13.7 135.6 -8.6 -26.0 -14.7 91.2
IPCA Lab Buy 2038 2560 2456 1162 -5.7 -13.9 2.6 73.0 -9.6 -30.4 -23.1 40.4
Laurus Labs Buy 342 410 386 62 -4.9 23.3 -66.2 -21.9 -8.8 -0.4 -74.7 -36.6
FEBRUARY 2021 6 Sharekhan ValueGuideEQUITY FUNDAMENTALS REPORT CARD
STOCK IDEAS STANDING (AS ON FEBRUARY 03, 2021)
CURRENT PRICE AS ON PRICE 52 WEEK ABSOLUTE PERFORMANCE RELATIVE TO SENSEX
COMPANY
RECO 03-FEB-2021 TARGET HIGH LOW 1M 3M 6M 12M 1M 3M 6M 12M
Lupin Hold 1038 1350 1122 505 1.1 9.9 10.3 43.9 -3.1 -11.2 -17.3 16.8
Sanofi India Buy 7887 9249 8999 5900 -5.3 -4.9 -3.8 18.3 -9.2 -23.1 -27.9 -4.0
Shilpa Medicare Buy 447 570 692 240 -1.7 5.1 -24.1 22.5 -5.7 -15.0 -43.1 -0.6
Solara Active Pharma Sciences Buy 1453 1700 1550 367 20.6 33.0 70.5 191.6 15.6 7.5 27.9 136.7
Strides Pharma Sciences Buy 896 1020 1000 271 -4.4 39.0 91.5 85.4 -8.4 12.3 43.6 50.5
Sun Pharmaceutical Industries Buy 629 700 648 315 4.2 24.8 19.1 47.9 -0.1 0.9 -10.7 20.0
Torrent Pharma Hold 2672 3100 3040 1619 -4.4 2.8 -5.5 38.6 -8.3 -16.9 -29.2 12.5
BSE Health Care Index 21568 22464 10948 -2.2 10.1 15.8 55.3 -6.2 -11.0 -13.2 26.0
Building materials
APL Apollo Tubes^ Buy 945 1180 990 205 6.1 -70.7 -52.7 -52.2 1.7 -76.4 -64.5 -61.2
Astral Poly Technik Hold 1944 2100 2154 748 8.3 72.4 105.2 64.6 3.9 39.3 53.9 33.6
Century Plyboards (India) Buy 269 295 290 95 11.8 48.9 105.3 58.8 7.2 20.3 53.9 28.9
Grasim Buy 1193 ** 1219 380 23.9 52.2 91.0 50.3 18.7 23.0 43.2 22.0
Greenlam Industries New Ide
a Buy 882 1100 1010 450 11.6 16.1 19.9 -11.8 7.0 -6.1 -10.1 -28.4
JK Lakshmi Cement Buy 357 410 371 180 3.4 23.1 19.6 -0.2 -0.8 -0.5 -10.3 -19.0
Kajaria Ceramics Buy 869 950 918 295 22.7 51.2 113.7 54.9 17.6 22.2 60.3 25.7
Pidilite Industries Buy 1739 1875 1850 1186 -2.5 11.3 29.5 11.7 -6.6 -10.1 -2.9 -9.3
Shree Cement Buy 25992 27000 28281 15500 8.2 18.6 20.4 6.1 3.7 -4.1 -9.7 -13.9
Supreme Industries Limited Buy 1915 2020 1998 791 11.1 33.1 47.5 42.0 6.5 7.6 10.6 15.3
The Ramco Cements Buy 861 1000 937 457 7.8 2.9 25.3 7.1 3.4 -16.8 -6.0 -13.1
UltraTech Cement Buy 6072 6700 6486 2913 14.0 33.9 51.7 35.7 9.3 8.2 13.7 10.1
Discretionary
ABFRL Buy 151 200 281 96 -9.5 1.8 23.5 -34.1 -13.2 -17.7 -7.4 -46.5
Arvind@ Buy 53 68 58 19 9.1 54.9 78.0 21.8 4.6 25.2 33.5 -1.1
Bata India Buy 1567 1765 1897 1017 -1.7 19.2 24.3 -16.0 -5.8 -3.7 -6.8 -31.8
Inox Leisure Buy 336 400 511 158 10.6 27.2 42.1 -18.4 6.0 2.8 6.6 -33.8
Jubilant Foodworks Buy 2644 3145 2987 1142 -3.8 21.9 46.3 36.9 -7.8 -1.5 9.7 11.1
KPR Mill Buy 929 1100 999 317 6.2 26.0 110.3 47.5 1.8 1.9 57.7 19.7
Relaxo Footwear Buy 838 1005 928 493 0.1 21.4 36.7 13.4 -4.0 -1.9 2.5 -7.9
The Indian Hotels Company Buy 123 155 144 62 -2.8 27.3 59.8 -12.6 -6.8 2.9 19.8 -29.0
Titan Company Limited Buy 1524 1710 1621 720 -1.7 25.4 41.8 19.5 -5.8 1.4 6.4 -3.0
Trent Ltd Buy 679 825 809 368 0.0 1.6 21.2 13.2 -4.1 -17.9 -9.1 -8.1
Welspun India Buy 72 90 78 18 0.7 6.5 67.4 70.7 -3.5 -13.9 25.5 38.6
Wonderla Holidays Hold 203 227 248 105 -3.0 27.0 47.9 -16.3 -7.0 2.7 10.9 -32.1
ZEE Entertainment Buy 244 275 261 114 11.4 34.2 70.2 -0.4 6.8 8.5 27.7 -19.2
Diversified / Miscellaneous
Bajaj Holdings Buy 3388 4312 3942 1472 7.8 47.0 30.5 -9.6 3.4 18.8 -2.1 -26.6
Bharat Electronics Buy 139 152 143 56 5.7 56.4 38.8 63.9 1.4 26.4 4.1 33.0
Castrol India Buy 129 150 162 90 4.7 14.5 12.2 -16.4 0.4 -7.5 -15.8 -32.2
Gateway Distriparks Buy 156 ** 182 71 24.5 67.2 85.8 19.9 19.4 35.1 39.3 -2.7
JSW Steel Buy 393 432 419 133 -2.5 23.6 72.3 52.1 -6.6 -0.1 29.2 23.4
Mahindra Logistics Buy 465 562 544 199 9.8 25.3 55.5 11.4 5.3 1.3 16.6 -9.6
Polyplex Corporation Hold 735 950 878 283 4.4 -2.0 14.0 36.1 0.1 -20.8 -14.5 10.5
Quess Corp Buy 602 715 761 165 13.4 48.0 70.3 -3.7 8.7 19.6 27.7 -21.8
TCI Express Buy 950 1054 1024 491 -0.1 22.2 35.0 6.5 -4.2 -1.2 1.2 -13.6
Triveni Engineering & Industries Buy 72 90 85 29 -0.1 3.1 21.5 -0.1 -4.2 -16.7 -8.9 -18.9
BSE500 Index 19365 19937 9758 4.2 24.9 34.4 23.9 -0.1 0.9 0.8 0.5
CNX500 Index 12174 12469 6152 4.1 24.7 34.2 23.6 -0.2 0.8 0.6 0.3
CNXMCAP Index 22435 22929 10750 4.9 29.2 43.4 25.3 0.6 4.4 7.6 1.7
** Price under review @ Reco price adjusted for demerger # Reco price adjusted for bonus ^ Reco price adjusted for stock split
FEBRUARY 2021 7 Sharekhan ValueGuideFrom the Editor’s Desk
From the Editor’s Desk Firing on twin cylinders
Post the weakness in January, the bulls have made a strong comeback. Sensex has comfortably
crossed the 50,000 mark whereas the CNX Nifty is sailing smoothly over the 15,000 mark. The
rally was reignited by the bold and growth oriented Union Budget.
The Union Budget surprised the street with the shift in fiscal policy priorities. Economic growth
takes precedence over fiscal prudence now. The government has signaled a multi-year
phase of expansionary fiscal policy to fund the investment led economic growth with focus on
infrastructure development and capital expenditure, thereby, putting India on a higher growth
trajectory over the next few years. More importantly, the government has taken a pragmatic
stand to monetise operational assets of public sector units rather than increase the burden on
tax payers to fund the ambitious growth plan.
The Reserve Bank of India (RBI) has already done its bit by taking a highly accommodative
monetary policy stance. Over the past one year, it has aggressively cut interest rates and
provided the required liquidity support for effective transmission of low interest rates in the
banking system. In its post Budget policy review meet, the regulator has retained its dovish
stance with the preference for supporting growth remaining high on the agenda.
For the first time in decades, both the fiscal and monetary policy is so supportive for growth in
the economy. Also, the government is rolling out additional growth supportive measures like
product linked incentive (PLI) schemes to boost manufacturing sector by offering incentives
worth Rs. 2 trillion, introducing a auto scrapping policy and ensuring availability of credit for
infrastructure projects by setting up an institution with a mandate to provide credit of Rs. 5
trillion over the next three years.
No wonder, the economy is set to show a ‘V” shaped revival with real GDP growth estimated
at around 11% in FY2022 as against a contraction of 7.5% in FY2021. This is good news for
corporate earnings and equity markets. However, the massive government borrowing program
to fund the high fiscal deficit is likely to put pressure on bond yields and adversely impact
returns in the fixed income market.
Last but not the least, global cues would also impact Indian equities. Despite the concerns
related to lockdown due to second wave of the Coronavirus, the US markets has surged to
new high. The rally in the emerging markets in general has been encouraging in the past few
weeks. Though the foreign investor inflows (FII) have been volatile lately, the macro set-up is
favourable with sustained low interest rates, ample liquidity and accommodative policy stance
in US, Europe and other major regions.
In conclusion, invest for the long haul. What’s important is the time spent in the markets rather
than trying to time the markets. Tactical readjust of allocation to an asset class could be in the
range of 10-12% of your total investable funds and not 50-75% as seen among many investors
lately.
Happy Investing!
FEBRUARY 2021 8 Sharekhan ValueGuideEQUITY FUNDAMENTALS STOCK IDEA
Intellect Design Arena Limited
Date: February 03, 2021 Designing the Future
Reco Price
Buy PT : Rs. 500 Rs. 361
Summary
• We initiate coverage on Intellect Design with a Buy rating, with a PT of Rs. 500 as it is well-poised to gain market share given its future-ready products with flexible
modules.
• Stock trades at reasonable valuation of 16x/12x its FY2022E/FY2023E earnings. Favorable industry tailwinds, anticipated improving financial metrics to aid re-rating
of stock.
• The company focuses on increasing license-linked revenues, which is expected to improve profitability. Company turned net cash positive of Rs. 124 crore in
Q3FY2021 from net debt of Rs. 102 crore in Q3FY2020.
• Huge addressable market, strong traction for mature products, rising annuity revenue, and improving margins would help company to clock revenue and earnings
CAGR of 14% and 27% respectively over FY2021-23E.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Intellect-Feb03_2021_3R_StockIdea.pdf
Greenlam Industries Limited
Date: February 03, 2021 A perfect fit
Reco Price
Buy PT : Rs. 1,100 Rs. 842
Summary
• We initiate coverage on Greenlam Industries Limited (GRLM) with a Buy rating and price target of Rs. 1100.
• Greenlam is expected to ride on a strong growth trajectory led by its leadership positioning, strong domestic growth outlook and rising export opportunities.
• Brownfield capacity expansions would be the next leg of growth. Despite capex, balance sheet and return ratios would improve further.
• Structural growth drivers such as rising incomes, urbanisation, real estate construction, Atmanirbhar Bharat, etc, would provide long-term sustainable growth
trajectory.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Greenlam-Feb03_2021_3R_Stock%20Idea.pdf
Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.
FEBRUARY 2021 9 Sharekhan ValueGuideStock Update EQUITY FUNDAMENTALS
Recommendation Price Target/ Upside (%)
Date Company Report Type Reco Price (Rs.)
Latest Chg Latest Chg
Jan 01, 2021 Mahindra & Mahindra Stock Update BUY 732 872
Summary
We maintain a Buy rating on M&M with unchanged price target of Rs. 872 considering key business decisions announced on January 1.
We believe these decisions are in line M&M’s commitment to achieve an 18% RoE by exiting loss-making subsidiaries and focusing on core businesses.
We expect M&M to benefit from its leadership status in tractor space, strengthened position in LCV segment and steady market share gains in UV segment.
Stock is attractively valued with a P/E multiple of 17.2x and EV/EBITDA multiple of 9x its FY2023E estimates; it trades at a discount to long-term average
multiples.
Stock is attractively valued with a P/E multiple of 17.2x and EV/EBITDA multiple of 9x its FY2023E estimates; it trades at a discount to long-term average
multiples.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/MnM-3R-Jan01_2021.pdf
Jan 01, 2021 Indraprastha Gas Limited Stock Update BUY 507 585
Summary
Volumes bouncing back to 97% of pre-COVID levels, high gross margin of Rs13.7/scm (potential increase of 12.2% y-o-y in H2FY21), rupee appreciation and
better operating leverage would drive to 27%/23%y-o-y growth in EBITDA/PAT in H2FY21.
Long-term volume growth outlook remains intact given regulatory push and ramp-up of volumes in new GAs. The management expects volumes to reach 10
mmscmd over next 5 years, which implies a 12% volume CAGR over FY20-FY24E.
We do not see any meaningful volume risk from competition as open-access regulations exclude OMCs as third-party. This removes a major overhang for CGD
players, and the focus would shift back to volume and margin growth.
We maintain a Buy on IGL with a revised PT of Rs. 585 as volume growth would support strong PAT CAGR of 20% over FY21E-FY23E with a RoE of ~21%. Robust
volume growth track-record justifies premium valuation of 24.6x its FY23E EPS.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/IGL_3R-Jan01_2021.pdf
Jan 01, 2021 Bharat Electronics Stock Update BUY 126 152
Summary
We retain a Buy rating on Bharat Electronics Limited (BEL) with a revised PT of Rs. 152 rolling forward our valuation multiple to FY2023E.
BEL is well positioned to benefit from rising defence expenditure supported by a strong manufacturing base, execution track record and continued focus on
developing in-house R&D capabilities.
Strong YTD order inflow, healthy order pipeline and order book offer sustainable revenue visibility.
Management remains confident of double-digit revenue growth, margins of ~20% and order inflows of ~Rs 15000 crore for FY21E.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/BEL-3R-Jan01_2021.pdf
Cholamandalam Investment and Finance
Jan 04, 2021 Stock Update BUY 443 520
Company
Summary
Cholamandalam Investment and Finance Company (CIFC) is well placed to benefit as macro factors turn favourable (lower borrowing costs, healthy offtake in
auto sales); a combination of strong collections and high provisions for CIFC also provides comfort.
Growth outlook is improving for vehicles finance NBFCs, along with lower credit cost (improving collections) fuelling improved earnings estimates.
At the CMP, the stock is available at 4.1x/3.3x its FY2022E/FY2023E ABVPS, supported by improved growth outlook, backed by its superior performance
throughout cycles, high medium-term RoEs, and strong management at the helm; we have fine-tuned our estimates accordingly.
We maintain our Buy rating with a revised price target of Rs. 520.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Cholamandalam-3R-Jan04_2020.pdf
Jan 04, 2021 Lumax Auto Technologies Limited Stock Update BUY 123 148
Summary
We maintain our Buy rating on Lumax Auto Technologies Limited (Lumax Auto) with a revised PT of Rs. 148, factoring in better multiples owing to a strong traction
in business outlook.
We expect Lumax Auto to benefit from the recovery in the two-wheeler and four-wheeler industry, a diversified portfolio, richer product mix and increase in
content per client.
We expect Lumax Auto’s earnings to grow by 59.1% in FY2022E and 26.5% in FY2023E, driven by a 20.2% CAGR during FY2021E-23E and a 140-bps improvement
in EBITDA margin.
Stock is attractively valued at a P/E multiple of 10.8x and EV/EBITDA multiple of 5.4x its FY2023 estimates.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Lumax_Auto_3R-Jan04_2021.pdf
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FEBRUARY 2021 10 Sharekhan ValueGuideEQUITY FUNDAMENTALS Stock Update
Recommendation Price Target/ Upside (%)
Date Company Report Type Reco Price (Rs.)
Latest Chg Latest Chg
Jan 05, 2021 Mahanagar Gas Limited Stock Update BUY 1,097 1,380
Summary
Mahanagar Gas Limited’s (MGL) earnings outlook for H2FY2021 is strong (expect PAT to grow 23% y-o-y) as volume recovered close to pre-COVID level and
sustained high gross margin of Rs. 17.3/scm (likely increase of 19% y-o-y in H2FY2021).
Long-term volume growth outlook remains intact, given regulatory push and potential volume ramp-up at Raigad GA (0.6mmscmd volume potential). This would
drive sustainable 6%-7% annual volume growth for MGL.
PNGRB’s notification excluding OMCs as third-party removes major overhang as ~72% of MGL’s CNG stations are operated by OMCs. This removes the risk of
competition in the high-margin CNG business.
MGL’s 15% underperformance to Sensex in the past one year should reverse as earnings growth outlook has improved significantly and overhang of open access
is also over. MGL’s valuation of 11.9x its FY2023E EPS is most attractive in the CGD space. Thus, we retain our Buy rating on MGL with an unchanged PT of Rs.
1,380.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/MGL_3R-Jan05_2021.pdf
Jan 06, 2021 Hindustan Unilever Limited Stock Update BUY 2,391 2,790
Summary
Hindustan Unilever Limited’s (HUL) Q3FY2021 operating performance was largely in-line with expectation with 21% growth in revenue (core business growth of
7%) and OPM at 24.1% (operating profit grew by ~17% and adjusted PAT grew by 15.6%).
Volume growth in domestic business improved to 4% from 1% in Q2FY2021 (was in-line with street expectation of 4%-5%).
80% of essential portfolio grew by 10%, discretionary recovered to almost 100%. Rural India continues to grow in double digits. Management is optimistic of
delivering better performance in Q4 because of improved demand environment.
We broadly maintain our estimates for FY2022/FY2023. HUL remains one of our top picks in the large-cap space. We maintain Buy with an unchanged PT of
Rs. 2,790.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HUL-3R-Jan06_2021.pdf
Jan 06, 2021 Amber Enterprises Limited Stock Update BUY 2,630 3,170
Summary
We retain a Buy on Amber Enterprises (Amber) with a revised PT of Rs. 3,170, given multiple growth drivers that brighten the net earnings growth outlook over
FY2021E-FY2023E.
Company would be one of the key beneficiaries from the import ban on ACs with refrigerants and likely expansion of PLI schemes for AC and components.
Capex expansion of 1 MTPA each at two locations for ACs and components to come onstream by Q1FY2023.
Export of components to start from FY2022 and RACs from CY2022. It is set to build 18-20 commercial refrigeration products over 2-3 years. Order backlog is
strong across products.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Amber-3R-Jan06_2021.pdf
Jan 06, 2021 Finolex Cables Limited Stock Update BUY 368 450
Summary
We retain our Buy rating on Finolex Cables with revised PT of Rs. 450 rolling forward our valuation multiple to FY2023E.
Expect H2 to be better than H1 as cables see improvement with rising infrastructure investments and scaling of the FMEG business.
Finolex also operates in telecom cables and remote working has led to demand for broadband and WiFi at home, resulting in increase in small fibre cable
segment, where Finolex remains a beneficiary.
Finolex’s strong balance sheet and net cash position provide comfort in the present environment.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Finolex-3R-Jan06_2021.pdf
Jan 06, 2021 JMC Projects (India) Limited Stock Update BUY 69 83
Summary
We retain a Buy rating on JMC Projects with a revised price target of Rs. 83, considering a positive outlook for the sector and favorable valuation.
Road project awarding and construction activities increased during November 2020. Toll project revenues are also rising robustly as reflected in FASTag and
NHAI toll collections.
Bank credit deployment to roads sector has started improving with a healthy y-o-y rise during September to November which should help execution of ongoing
projects and financial closure of new projects.
Management expects restructuring and refinancing of BOT road assets to conclude by FY2021-end,while asset divestment is expected to take time.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/JMC-3R-Jan06_2020.pdf
FEBRUARY 2021 11 Sharekhan ValueGuideStock Update EQUITY FUNDAMENTALS
Recommendation Price Target/ Upside (%)
Date Company Report Type Reco Price (Rs.)
Latest Chg Latest Chg
Jan 07, 2021 Polycab India Limited Stock Update BUY 1,280 1,530
Summary
We retain a Buy on Polycab India Limited (Polycab) with a revised PT of Rs. 1,530, given the improvement in demand in underlying user-industries.
Strong traction in new launches and demand from residential housing would drive the company’s housing wires and FMEG businesses.
Exports would aid revenue growth in cables & wires segment, for which global market is estimated at $140-150 billion with imports of $35-40 billion; company’s
addressable market remains at ~$15 billion.
Company to deepen its presence in semi-urban and rural markets; focus on premiumisation and increasing share of FMEG sales in existing network to drive the
business.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Polycab-3R-Jan07_2021.pdf
Jan 07, 2021 Schaeffler India Limited Stock Update BUY 4,573 5,258
Summary
We maintain our Buy rating on Schaeffler India Limited (SIL) with a revised PT of Rs. 5,258, factoring in better multiples on strong traction in business outlook
and upgrade in earnings estimates.
We expect Schaeffler to benefit from industrial and automobile aftermarkets, strong growth traction in railways and export segments and better prospects for
bearings business, amid stricter norms.
Earnings likely to grow by 51.7% in CY2021E and 32.9% in CY2022E, driven by a 21.4% CAGR during CY2020E-22E and a 320 bps improvement in EBITDA margin.
Stock trades attractively at P/E multiple of 27x and EV/EBITDA multiple of 15.2x its CY2022E estimates.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Schaeffler-3R-Jan07_2021.pdf
Jan 07, 2021 Century Plyboards (India) Limited Stock Update BUY 246 295
Summary
We retain a Buy on Century Plyboards Limited (Century) with a revised PT of Rs. 295.
Healthy residential realty launches and sales across India in Q3FY2021 to benefit its Plywood and laminates business.
Centre’s focus on affordable housing and various state government incentives to the residential housing sector is expected to maintain growth momentum.
Capex in MDF space to provide next leg of growth. Strong balance sheet and healthy cash flow generation capabilities.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Century_Plyboards_3R-Jan07_2020.pdf
Jan 08, 2021 Tata Consultancy Services Stock Update BUY 3,120 3,590
Summary
We maintain a Buy on TCS with a revised PT of Rs. 3,590, given its differentiated positioning and deep relationships with large global enterprises.
Q3FY21 was the second consecutive quarter of strong all-round performance, led by robust demand, market share gains and deal ramp-ups. FCF generation,
deal win TCVs and net employee addition remained strong.
Owing to end-to-end capabilities, deep domain expertise, contextual knowledge and excellent product and platform offerings, TCS is well-placed to tackle
competition.
TCS’ revenue and earnings to clock a 11%/15% CAGR over FY2021-23E; we prefer TCS on account of its full-service business model, preferred partner for clients’
transformation journey and higher payout policy.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TCS_3R-Jan08_2020.pdf
Jan 08, 2021 Titan Company Limited Stock Update BUY 1,549 1,710
Summary
We maintain a Buy on Titan Company (Titan) with a revised PT of Rs. 1,710; expected strong recovery in FY2022 and robust return profile make it a better play
in retail space.
Jewellery sales grew by 15% in Q3,as festive demand uptick sustained during rest of the quarter. Watches and Eyewear businesses recovered to 88% and 92%
in Q3 and are expected to fully recover by Q4.
Better operating leverage would help margins to recover q-o-q and stand at ~11% in Q3; FY2022, OPM is expected to be 12.5-13%.
Higher wedding demand, share gains from small players and improvement in discretionary spends would help jewellery business achieve good growth in
FY22/23. Watches to see strong recovery as wearable and bands gaining strong traction.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Titan-Jan08_2021.pdf
FEBRUARY 2021 12 Sharekhan ValueGuideEQUITY FUNDAMENTALS Stock Update
Recommendation Price Target/ Upside (%)
Date Company Report Type Reco Price (Rs.)
Latest Chg Latest Chg
Jan 08, 2021 Arvind Limited Stock Update BUY 52 68
Summary
Q3FY2021 revenue recovered to ~80% led by a strong recovery in Denim and garments segment, which stood at 81% and 89%, of pre-COVID levels.
Textile business’ EBIDTA margins reverted to FY2020 levels of 12.5%, while advanced material prices stood at 14%, resulting in a 79 bps improvement in the
OPM to 10.7%.
Better operating leverage and higher margins from AMD would mitigate impact of a sharp increase in input prices in the near term. Debt reduced by Rs. 300
crore in last nine months.
We broadly maintained our earnings estimates for FY2022/23. We maintain our Buy recommendation with PT of Rs. 68.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Arvind-Jan08_2021.pdf
Jan 08, 2021 SRF Limited Stock Update BUY 5,894 6,760
Summary
SRF Limited (SRF) is poised for a strong earnings cycle, led by continuous capex in specialty chemical (expected to grow at 20% for the next couple of years),
cyclical recovery in refrigerants, and strong momentum in the packaging films segment.
We believe calibrated expansion in the right space (chemicals) provides strong capacities for sustainable high growth (even beyond FY2023) and would drive
further valuation re-rating for SRF.
Higher margins in the packaging business and steady double-digit growth in specialty chemical would help SRF to post strong 68% y-o-y growth in PAT to Rs.
317 crore in Q3FY2021.
We maintain our Buy rating on SRF with a revised PT of Rs. 6,760 (to reflect higher valuation multiple given our expectation of superior earnings growth and
strong balance sheet. SRF is our top pick in the specialty chemical space.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/SRF-3R-Jan08_2021.pdf
Jan 08, 2021 Vinati Organics Limited Stock Update BUY 1,316 1,550
Summary
We upgrade Vinati Organics to Buy (from Hold) with a revised PT of Rs. 1,550 as a likely volume/margin recovery in key ATBS segment and ramp-up of Butyl
Phenol to drive sustained high earnings growth (expect 31% PAT CAGR over FY2021E-FY2023E).
ATBS segment’s realisation would also improve as price of key input acrylonitrile rose 20% in November 2020, which in turn could help margin recover in
Q4FY2021. Moreover, the demand from pharma, plastic additives, agrochemicals, water treatment chemicals would remain strong.
Dominant global market share of 65% in ATBS/IBB, ~12 new products in R&D phase and massive export opportunities in specialty chemical space would drive
sustained high double-digit earnings growth even beyond FY2023.
Company aims to double revenues over next 3-4 years with long-term sustainable EBITDA margins of 30-35%.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Vinati_Organics_3R-Jan08_2021.pdf
Jan 11, 2021 GNA Axles Limited Stock Update BUY 349 410
Summary
We maintain our Buy rating on GNA Axles Limited (GNA) with a revised PT of Rs. 410, factoring in better multiples on a strong traction in business outlook and
an upgrade in earnings estimates.
GNA reported better-than-expected Q3FY2021 results with net earnings growing by robust 248.6% y-o-y at Rs. 26.6 crore, driven by 28.9% growth in net
revenue and 628 bps expansion in EBITDA margin at 17.4%.
We expect GNA’s earnings to grow by 29.1% in FY2022E and 22.9% in FY2023E, driven by a 14% CAGR during FY2021E-FY2023E and a 70-bps improvement
in EBITDA margin.
The stock trades attractively at P/E multiple of 9.6x and EV/EBITDA multiple of 4.6x its FY2023E estimates.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/GNA-3R-Jan11_2021.pdf
Jan 12, 2021 Maruti Suzuki Limited Stock Update BUY 8,160 9,000
Summary
We maintain our Buy rating on Maruti Suzuki Limited (MSL) with a revised PT of Rs. 9,000, factoring better multiples owing to resilient near-term outlook,
structural growth outlook, healthy cash flow generation, and return ratios.
MSL is likely to be the beneficiary of buoyant demand in the passenger vehicle (PV) segment, driven by rising demand in tier 2 and 3 cities and rural areas. MSL is
expected to sustain its dominant market share, aided by its strong product portfolio and positioning, brand appeal, and ability to launch new models frequently.
We expect MSL’s earnings to grow strongly by 44.5% and 19.5% in FY2022E and FY2023E, respectively, driven by 20.7% revenue CAGR (FY2021E-FY2023E)
and 300 bps improvement in EBITDA margin.
The stock is valued at P/E multiple of 25.8x and EV/EBITDA multiple of 17.4x its FY2023 estimates. We have revised our PT to Rs. 9,000. We maintain our Buy
rating on the stock.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Maruti-3R-Jan12_2021.pdf
FEBRUARY 2021 13 Sharekhan ValueGuideStock Update EQUITY FUNDAMENTALS
Recommendation Price Target/ Upside (%)
Date Company Report Type Reco Price (Rs.)
Latest Chg Latest Chg
Jan 12, 2021 Dr Reddy’s Laboratories Limited Stock Update BUY 5,357 6,500
Summary
We retain Buy Recommendation on Dr Reddy’s Laboratories Limited (DRL) with a PT of Rs 6,500.
Growth prospects are improving across most geographies. Business traction, sturdy product pipeline and easing of pricing pressures to drive US sales.
A likely improvement in the acquired portfolio and COVID-led growth opportunities in the near term would drive India performance.
The Sputnik-V Vaccine, if approved to unlock sizeable growth opportunity. Improving growth prospects, healthy balance sheet and strong return ratios could
support P/E multiple expansion. DRL’s sales and PAT expected to clock a 15% and 27% CAGR over FY2020-FY2023.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/DrReddy_3R-Jan12_2021.pdf
Jan 13, 2021 Infosys Stock Update BUY 1,388 1,650
Summary
We maintain a Buy on Infosys with a revised price target of Rs. 1,650 as we expect it to clock industry-leading growth in the next couple of years.
Q3FY21 was another stellar quarter, with revenue and margin significantly beating estimates, along with strong deal TCVs, account expansion, and robust FCF
generation.
Infosys raised revenue growth guidance to 4.5-5% in CC terms from 2-3% earlier and also revised OPM guidance upward to 24-24.5% from 23-24% for FY2021.
Infosys is well-placed to capture opportunities from clients’ transformation journeys and cost take-out initiatives given strong digital capabilities and execution
track record.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Infosys_3R-Jan13_2021.pdf
Jan 13, 2021 Wipro Stock Update BUY 459 510
Summary
We maintain our Buy rating on Wipro with a revised PT of Rs. 510 given large deal wins and speedy decisions on strategic changes across organisation for
improving growth trajectory.
Revenue was broadly in-line, margin beat our estimates; CC revenue grew 3.4% q-o-q, while EBIT margin for IT services expanded 246 bps q-o-q to 21.7%; cash
conversion remained strong.
Wipro provided marginally better-than-expected growth guidance of 1.5-3.5% q-o-q for Q4FY2021E; EBIT margin to sustain in the medium-term despite higher
investments, aided by revenue growth and higher offshoring mix.
We expect Wipro’s revenue growth trajectory to significantly exceed historical levels in FY2022E and FY2023E, because of strong deal wins, a robust deal
pipeline and its full service model.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Wipro_3R-Jan13_2021.pdf
Jan 13, 2021 Tata Elxsi Limited Stock Update BUY 2,376 2,850
Summary
We retain our Buy rating on Tata Elxsi Limited (TEL) with a revised PT of Rs. 2,850, given sustained recovery in the auto segment and rising spends in the digital
engineering space.
Beat on all fronts; Constant currency revenue grew by 10% q-o-q, led by strong growth in its key business segments; EBITDA margin improved by 266bps q-o-q
despite wage revision, led by higher utilisation and increasing offshore mix.
The company’s continued investments in sales and marketing, delivery and building new-age capabilities would help it to win large long-term deals going
ahead. Focus on cross selling of design-related services likely to drive growth.
We expect margin to sustain in the medium term, given 1) continued reduced travel and administration expenses, 2) WFH efficiencies, 3) higher offshoring, and
4) better cost control. The company’s offshore revenue contribution may not come back to pre-COVID level.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Tata_Elxsi_3R-Jan13_2021.pdf
Jan 13, 2021 CESC Limited Stock Update BUY 684 825
Summary
CESC reported strong results with a 21% y-o-y growth in consolidated PAT to Rs. 324 crore, led by higher profitability at Dhariwal Infrastructure (PAT of Rs. 28
crore versus Rs. 15 crore loss in Q3FY20), Haldia Energy (PAT growth of 12% y-o-y) and Crescent Power (PAT of Rs. 6 crore versus loss of Rs. 18 crore in Q3FY20).
Management guided for ~11% y-o-y growth in standalone PAT in Q4FY2021 led by higher incentive income, cost rationalisation and slight volume growth (as
power demand reached pre-COVID-19 level in Kolkata).
Turnaround of subsidiaries, board approval to consolidate power distribution business (ex-Kolkata) under one arm and decision to increase stake in Noida
Power to 72.73% (from 49.6%) would act as a key rating trigger.
We maintain our Buy rating on CESC with an unchanged SoTP-based PT of Rs. 825. Stock trades at attractive valuation of 0.7x FY2023E P/BV and offers
dividend yield of 6-7% (announced interim dividend of Rs45/share for FY2021).
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/CESC_3R-Jan13_2021.pdf
FEBRUARY 2021 14 Sharekhan ValueGuideEQUITY FUNDAMENTALS Stock Update
Recommendation Price Target/ Upside (%)
Date Company Report Type Reco Price (Rs.)
Latest Chg Latest Chg
Jan 14, 2021 HDFC Life Insurance Stock Update BUY 707 850
Summary
We expect the Union Budget to provide favourable policy steps for the insurance industry; Possible steps may include providing a separate limit over and above
the already available 80C limits and providing tax benefits to pension schemes (a la NPS) etc, HDFC Life being largest player is likely to benefit from tailwinds.
Latest figures for HDFC Life indicates strong traction; NBP up 18.8% YoY / 11% y-o-y for Q3FY2021 / 9MFY2021.
HDFC Life is attractive due to its strong business franchise, backed by favourable product/distribution mix, high bancassurance share, and robust margins.
The stock trades at 5.0x/4.2x its FY2022E/FY2023E EVPS; well-diversified product bouquet is a positive; we maintain Buy with a revised PT of Rs. 850.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HDFC_Life-3R-Jan14_2021.pdf
Jan 14, 2021 Carborundum Universal Limited Stock Update BUY 411 500
Summary
We recommend Buy on CUMI with a revised PT of Rs. 500, rolling forward our valuation multiple to FY2023E.
CUMI with its diversified user industries is expected to be a major beneficiary led by improvement in economic recovery, manufacturing activity, and auto sales.
Improving overseas operations aided by capacity expansion, success of new products, and being an alternative global supplier are likely to aid exports growth.
Strong balance sheet, healthy return ratios, and consistent dividend paying record are key salient features.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Carborundum-3R-Jan14_2021.pdf
Jan 15, 2021 HDFC Bank Stock Update BUY 1,466 1,810
Summary
We retain a Buy on HDFC Bank with a revised price target (PT) of Rs. 1,810.
Q3FY2021 results were strong as operational performance exceeded expectations, margins rose; asset quality improved on a q-o-q basis; advances & CASA
saw a healthy pick-up q-o-q.
Management commentary was positive and reassuring, indicating a bright long-term outlook; net interest margin (NIMs) stood at 4.2% (up 10 bps q-o-q and
within the guidance range) due to healthy advances growth and high CASA share.
HDFC Bank currently trades at 3.7x/3.2x its FY2022E/FY2023E ABVPS, which we find is reasonable; we have fine-tuned our estimates and the target multiple
for the bank considering improving earnings visibility.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HDFC_Bank_3R-Jan15_2021.pdf
Jan 15, 2021 HCL Technologies Stock Update BUY 989 1,250
Summary
We stick to our Buy rating on HCL Technologies with a revised PT of Rs. 1,250.
Q3 saw strong all-round performance - beat estimates on all fronts, robust FCF generation, all-time low attrition rate, good deal bookings; EBIT margins rose
by 127bps q-o-q despite wage revision, led by S&G leverage and higher offshoring.
Given HCL Tech’s capabilities in digital space, consistent deal wins, improving digital capabilities and increasing spends on transformation initiatives, HCL Tech
would return to industry-level growth trajectory in the coming years.
Company has raised Q4FY2021E CC revenue growth guidance to 2-3% (including contribution from DWS acquisition) from 1.5-2.5%. FY2022 revenue growth
would be driven by improving digital competencies, higher digital adoption, strong deal pipeline and deep client relationships.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HCL_Tech-3R-Jan15_2021.pdf
Jan 15, 2021 Hindustan Petroleum Corporation Limited Stock Update BUY 229 275
Summary
The sharp contraction in auto fuel marketing margin in January 2021 seems transitory and is expected to improve, given the likely rationalisation of excise duty
on petrol/diesel, better margin on BS VI products, and benchmarking to global standards (post the potential privatisation of BPCL).
Despite concern on near-term marketing margin, HPCL’s earnings momentum is expected to remain strong in H2FY2021, led by inventory gain ($12/bbl rise in
spot oil price versus Q3FY2021 average), normalisation of volumes, and recovery in GRM.
Strong earnings visibility (expect 43% PAT CAGR over FY2020-FY2023E) and completion of refinery capex cycle would result in higher dividends (yield of 7%)
and RoE of 17%-18%. Share buyback at Rs. 250/share to provide support HPCL’s stock price.
HPCL’s valuation of 5.7x its FY2023 EPS is attractive and factors in historical below-average auto fuel marketing margin and ignores the potential recovery in
refining margin. Hence, we maintain our Buy rating on HPCL with a revised PT of Rs. 275.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/HPCL_3R-Jan15_2021.pdf
FEBRUARY 2021 15 Sharekhan ValueGuideStock Update EQUITY FUNDAMENTALS
Recommendation Price Target/ Upside (%)
Date Company Report Type Reco Price (Rs.)
Latest Chg Latest Chg
Jan 18, 2021 Tata Consumer Products Limited Stock Update BUY 576 685
Summary
Tata Consumer Products Ltd (TCPL) Q3FY2021 was a mixed bag, as revenues grew by ~23%, but gross margins declined by 574 bps, synergistic benefits and
efficiencies resulted in just a 99 bps decline in OPM to 11.8%.
India beverages business grew by 46%; India foods revenues rose by 19%, US Coffee by 11% and International tea by 14%.
Acquisition of Soulfull will add value to India foods business with ‘better for you’ products. Out-of-home businesses NourishCo and Tata Starbucks have seen
substantial improvement and will add-on to growth in the coming quarters.
We have fine-tuned earnings estimates for FY21/22/23 to factor in higher-than-expected revenue growth and lower OPM. We maintain a Buy with unchanged
PT of Rs. 685.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/TCPL_3R-Jan18_2021.pdf
Jan 18, 2021 L&T Finance Holding Stock Update BUY 100 103
Summary
L&T Finance Holdings (LTFH) posted steady results for Q3FY2021, operational numbers were mixed, sequentially improved asset quality, but elevated
provisions were dampeners.
LTFH reported pick-up across its business, especially in rural and infrastructure along with improving collection efficiency. Asset quality improved, GS3 has
reduced to 5.12% (down 7BPS q-o-q); with PCR at 64% (from 69% in Q2).
Developments such as overhang of possible change in regulatory stance (for NBFCs), and rights issue (book value dilutive) have added to medium-term
uncertainty.
LTFH is available at 1.3x/1.2x its FY2022E/FY2023E ABVPS; we downgrade rating to Hold with a revised PT of Rs. 103.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/LnTFinance_3R-Jan18_2020.pdf
Jan 18, 2021 Mastek Limited Stock Update BUY 1,156 1,300
Summary
We maintain a Buy on Mastek with a revised PT of Rs. 1,300; recent drop of over 20% in stock provides long-term investors good entry point.
Current Group CEO Mr. John Owen has relinquished role as on January 18, 2021; Mr. Ashank Desai will be interim CEO until a new CEO is appointed.
Mastek has appointed one of the top US recruitment firm to search for a CEO, who would drive the company’s growth in the US markets given rising spends on
technologies and traction for its Cloud offerings.
Management confident of sustainable growth momentum in UK business given its track record of executing large projects for the UK government, multi-layer
relationships in accounts and a strong deal pipeline.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Mastek_3R-Jan18_2021.pdf
Jan 19, 2021 ICICI Lombard General Insurance Stock Update BUY 1,509 1,750
Summary
Q3FY2021 results were steady; the company reported mixed operational numbers, helped by lower combined ratios. However, upfronting of acquisition costs,
higher claims payout diluted the PAT performance compared to GDPI growth.
Premium incomes, which normalised in 9MFY2021 (GDPI growth of 3.9% y-o-y for 9MFY2021); combined ratio was lower at 97.9% (versus 100.4% in FY2020).
ILGI trades at 41x/33x its FY2022E/FY2023E EPS and valuations indicate its long-term business resilience even during challenging times.
We recommend Buy on ILGI with a revised PT of Rs. 1,750.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/ICICI_Lombard-3R-Jan19_2021.pdf
Jan 19, 2021 Gateway Distriparks Limited Stock Update BUY 118 150
Summary
We maintain a Buy on Gateway Distriparks Limited (GDL) with arevised SOTP-based PT of Rs. 150 due to its attractive valuations and an improved growth and
profitability outlook for its key verticals.
For Q3FY2021, GDL reported better-than-expected operational performance led by its Rail division. Strong operational performance along with lower interest
expense leads to beat on net earnings.
Strong volume growth outlook during FY2023 and FY2024 led by improving EXIM trade environment, commissioning of western DFC line and phase II JNPT
expansion.
Capex of Rs. 120 crore over the next two years for setting up two satellite rail terminals. Consolidated net debt reduced to Rs. 494 crore from Rs. 681 crore in
FY2020.
Read report - https://www.sharekhan.com/MediaGalary/StockIdea/Gateway_3R-Jan19_2021.pdf
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