# *RouteMobile* great story still untold..
1. Founded in 2004 & founders still at the helm which is always a great sign. Started with an initial investment of just 1 lakh rupees and the founders raised no more money until the IPO.
2. About 8-9 companies globally in the CPaaS industry; Twilio (D: I'm also invested in it) in US is the leader with mcap of $50B & expected revenue of $1.6B in FY'21. It's growing its revenues at 50% yoy with gross margins above 50%, and so market is pricing it acc'ly.
3. Route Mobile is the biggest in Asia and it has grown its revenues from 1.4L to 950 cr in FY'20. It should be around 1400cr in FY'21, and management is confident of maintaining these growth rates in the near future. Their aim is to grow to a billion dollar in revenues.
4. As per a recent Gartner study, 90% of global enterprises will rely on cPaaS offerings in 2023, up from 20% in 2020, and the industry should grow at 33% CAGR. I believe it is safe to assume that the company has a great TAM and should scale up reasonably well.
5. As per Twilio CEO Jeff Lawson, coronavirus has sped up digital transformation of companies by 6 years, and thus there are massive tailwinds for companies like #routemobile. @RouteSms (MD/CEO) in a recent interview with @BloombergQuint with @_nirajshah had a similar opinion.
6. Limited number of competitors and no public listed rivals in India. Their business model & network (built over 15 years) is certainly hard to replicate for a new entrant, and they do enjoy certain level of stickiness with their customers & network effects.
7. Some marquee customers include Facebook, Google, Samsung, ICICI Bank, SBI & few other Fortune 500 companies. They added 67 customers in Q3, FY'21. They have 3,000 monthly billable clients across the world.
8. There was 0 churn in top 50 customers in H1 FY'21 & 60% growth in recurring revenues which contributed 99% of their total revenues. Strong net revenue retention of 139% of top 150 customers b/w H1 FY'21 & FY'20. As a reference point, Twilio's NRR was 136% in FY'20.
9. Strong balance sheet with 450cr in cash & minor debt. This can be used for acquisitions as management has hinted in a recent interview. There should be an announcement in the coming weeks on a big acquisition.
Excellent cash flows & PBT/CFO was 145% in FY'20.
10. Their gross margins are pretty low at around 20% for a tech business, but management is confident of increasing it to 30% in the next 2 years aided by acquisitions and better product mix. I will definitely keep an eye on it.
11. Customer concentration is a concern with top 5 customers contributing 48% & top 10 customers 59%. But this is spread across geographies & offerings.
12. Promoters hold almost 66% of the business with some great funds like @AbakkusInvest @SunilBSinghania and @VQIndia @ravidharamshi77 invested in it.
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1. Founded in 2004 & founders still at the helm which is always a great sign. Started with an initial investment of just 1 lakh rupees and the founders raised no more money until the IPO.
2. About 8-9 companies globally in the CPaaS industry; Twilio (D: I'm also invested in it) in US is the leader with mcap of $50B & expected revenue of $1.6B in FY'21. It's growing its revenues at 50% yoy with gross margins above 50%, and so market is pricing it acc'ly.
3. Route Mobile is the biggest in Asia and it has grown its revenues from 1.4L to 950 cr in FY'20. It should be around 1400cr in FY'21, and management is confident of maintaining these growth rates in the near future. Their aim is to grow to a billion dollar in revenues.
4. As per a recent Gartner study, 90% of global enterprises will rely on cPaaS offerings in 2023, up from 20% in 2020, and the industry should grow at 33% CAGR. I believe it is safe to assume that the company has a great TAM and should scale up reasonably well.
5. As per Twilio CEO Jeff Lawson, coronavirus has sped up digital transformation of companies by 6 years, and thus there are massive tailwinds for companies like #routemobile. @RouteSms (MD/CEO) in a recent interview with @BloombergQuint with @_nirajshah had a similar opinion.
6. Limited number of competitors and no public listed rivals in India. Their business model & network (built over 15 years) is certainly hard to replicate for a new entrant, and they do enjoy certain level of stickiness with their customers & network effects.
7. Some marquee customers include Facebook, Google, Samsung, ICICI Bank, SBI & few other Fortune 500 companies. They added 67 customers in Q3, FY'21. They have 3,000 monthly billable clients across the world.
8. There was 0 churn in top 50 customers in H1 FY'21 & 60% growth in recurring revenues which contributed 99% of their total revenues. Strong net revenue retention of 139% of top 150 customers b/w H1 FY'21 & FY'20. As a reference point, Twilio's NRR was 136% in FY'20.
9. Strong balance sheet with 450cr in cash & minor debt. This can be used for acquisitions as management has hinted in a recent interview. There should be an announcement in the coming weeks on a big acquisition.
Excellent cash flows & PBT/CFO was 145% in FY'20.
10. Their gross margins are pretty low at around 20% for a tech business, but management is confident of increasing it to 30% in the next 2 years aided by acquisitions and better product mix. I will definitely keep an eye on it.
11. Customer concentration is a concern with top 5 customers contributing 48% & top 10 customers 59%. But this is spread across geographies & offerings.
12. Promoters hold almost 66% of the business with some great funds like @AbakkusInvest @SunilBSinghania and @VQIndia @ravidharamshi77 invested in it.
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*India’s Tata Power Launches SOLAROOF Campaign*
Tata Power is India’s largest integrated power utility, and it is putting more of its weight behind solar now — rooftop solar, no less. It is running a nationwide ad campaign — in both digital and print media — title SOLAROOF.
The campaign is not just for residential buyers, but also for commercial, industrial, and institutional buyers.
It is running in 31 cities in total. Tata Power has rooftop solar power solutions available in 26 states, 7 Union Territories, and 94 Indian cities
Tata Power installed its first rooftop solar system in 1991. It has installed a total of 464 MW of rooftop solar PV systems across the country. It also has 5.4 GW of utility-scale solar projects installed across India.
“As the leading power utility of the country, it is our constant endeavor to contribute to protecting the environment through cleaner and greener ways of consuming energy,” Ravinder Singh, Chief of Tata Power’s Solar Rooftop Business, said.
“With ‘SOLAROOF’, we wish to create awareness around our smart and sustainable Solar Rooftop solutions and help customers across the country to migrate to cost effective and environment friendly energy solutions.”
Tista Sen, Regional Creative Director, Wunderman Thompson, added: “The future begs the question what kind of planet are we leaving behind for our children. In this context solar energy and sustainability are what the campaign embraces.
Tata Power advocates life that harnesses the energy of the planet in an economical and easy to adopt way that is also financially viable. A combination of advocacy and a lifelong commitment that will make the brand resonate across homes in India.”
Putting Tata’s name behind rooftop solar power in a large-scale ad campaign is bound to stimulate a lot of sales. How many? We’ll see.
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Tata Power is India’s largest integrated power utility, and it is putting more of its weight behind solar now — rooftop solar, no less. It is running a nationwide ad campaign — in both digital and print media — title SOLAROOF.
The campaign is not just for residential buyers, but also for commercial, industrial, and institutional buyers.
It is running in 31 cities in total. Tata Power has rooftop solar power solutions available in 26 states, 7 Union Territories, and 94 Indian cities
Tata Power installed its first rooftop solar system in 1991. It has installed a total of 464 MW of rooftop solar PV systems across the country. It also has 5.4 GW of utility-scale solar projects installed across India.
“As the leading power utility of the country, it is our constant endeavor to contribute to protecting the environment through cleaner and greener ways of consuming energy,” Ravinder Singh, Chief of Tata Power’s Solar Rooftop Business, said.
“With ‘SOLAROOF’, we wish to create awareness around our smart and sustainable Solar Rooftop solutions and help customers across the country to migrate to cost effective and environment friendly energy solutions.”
Tista Sen, Regional Creative Director, Wunderman Thompson, added: “The future begs the question what kind of planet are we leaving behind for our children. In this context solar energy and sustainability are what the campaign embraces.
Tata Power advocates life that harnesses the energy of the planet in an economical and easy to adopt way that is also financially viable. A combination of advocacy and a lifelong commitment that will make the brand resonate across homes in India.”
Putting Tata’s name behind rooftop solar power in a large-scale ad campaign is bound to stimulate a lot of sales. How many? We’ll see.
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TOWERTALK
APRIL 3, 2021
Manappuram Finance plans to hive off Ashirwad Microfinance. With a loan portfolio of Rs. 5360 cr. across 23 states and 25 lakh customers, this may be a good value unlocking opportunity. Buy and retain for 2 years.
After the takeover of Bhusan Steel & Power, JSW Steel is keen to acquire Nilachal Ispat Nigam, a PSU. This expansion cum diversification plan can be a long term positive. Buy.
GSFC engaged in crop protection solutions, fertilizers and chemicals posted excellent Q3 results and is also faring well in Q4. With forecast of a normal monsoon, the share is a good buy.
An Ahmedabad based analyst considers Andhra Petro, Caprihans India, Cheviot, Gee, Haldyn Glass, H P Cotton, Ind Swift Lab, Klrfm, Likhitha Infra, Pioneer Embroideries, Pressman,Rana Sugars, Rubfila International, Religare Samrat Pharma and Vikram Thermo as potential multi-baggers of 2021-22
Be cautious on Graphite India as it is fraught with big risks. Its welding sector is still not out of the woods while sales and profitability is on the decline. Only investors with deep pockets and long-term vision may consider this stock.
IOL Chemicals & Pharmaceuticals is faring well and the deep correction in its share price is another lucrative opportunity. A new grass root plant is expected to start soon. Buy before it zooms again.
Specialty steelmaker, Mukand Ltd., has sold 55 acres of surplus land in Thane for Rs. 801 cr. to repay its debt. It has also sold its 51% stake in Mukand Sumi for about Rs 714 cr. Buy for the long term.
Steel prices are rising globally. NMDC has raised its lump iron ore price by 5%. Both SAIL and NMDC are good shares to add at current prices.
IRCON is likely to declare bonus shares, as per information submitted to the exchanges. Add for the long term.
IDFC Bank to raise up to Rs. 3000 cr. via QIP at a floor price of Rs. 60.34. Although this scrip looks fully priced, it is a good long-term hold. Add.
Three more Rafale Jets taking the total to 14 enlarges the business opportunity for Reliance Infrastructure. It has also sold Reliance Centre for Rs. 1200 cr. to repay YES Bank debt. The company is on its way to become debt-free. Buy.
Varun Beverages, the Indian bottler of Pepsico, witnesses rising volumes. As per company estimates, it expects 20-22% volume growth during the next two years. Buy.
HAL has logged a mindboggling Rs. 22,700 cr. in top line on the back of IAF dues in spite of production cut and interruptions on account of Covid-19. A second interim dividend is likely followed by a bonus issue. Add.
HCC has won a case against NHAI and expects to get around Rs. 1259 cr. as conciliation proceeds. Positive for HCC.
Dixon Technologies has met the investment targets to become eligible for the 6% PLI incentives. A big positive. Price will rise substantially in a year. Buy.
Bharti Airtel and Vodafone Idea have failed to pay their AGR installment by 31st March 2021. Price may dip marginally. Stay away for some time.
Indraprastha Gas has signed a long-term gas supply deal with Delhi Transport Undertaking to supply CNG to its buses for 10 years. A big positive. Add.
Ashok Leyland reported robust sales of 15,761 units in India (up by 810%). Results for Q4 are likely to be verry good. Add.
Interglobe Aviation (Indigo Airlines) has started 14 new flights under the Udaan Scheme to avail of incentives to encourage operations from unserved and underserved airports, and keep airfares affordable. Positive for the Company.
Hawkins’ strong Q3 earnings and running at full capacity with new products, is expected to report a bumper Q4 and for the whole year too. Add.
Jubliant Food is being tipped to gain by about 35% from the current level on better working results. In the last three years, the Company has reported over 22% CAGR.
APRIL 3, 2021
Manappuram Finance plans to hive off Ashirwad Microfinance. With a loan portfolio of Rs. 5360 cr. across 23 states and 25 lakh customers, this may be a good value unlocking opportunity. Buy and retain for 2 years.
After the takeover of Bhusan Steel & Power, JSW Steel is keen to acquire Nilachal Ispat Nigam, a PSU. This expansion cum diversification plan can be a long term positive. Buy.
GSFC engaged in crop protection solutions, fertilizers and chemicals posted excellent Q3 results and is also faring well in Q4. With forecast of a normal monsoon, the share is a good buy.
An Ahmedabad based analyst considers Andhra Petro, Caprihans India, Cheviot, Gee, Haldyn Glass, H P Cotton, Ind Swift Lab, Klrfm, Likhitha Infra, Pioneer Embroideries, Pressman,Rana Sugars, Rubfila International, Religare Samrat Pharma and Vikram Thermo as potential multi-baggers of 2021-22
Be cautious on Graphite India as it is fraught with big risks. Its welding sector is still not out of the woods while sales and profitability is on the decline. Only investors with deep pockets and long-term vision may consider this stock.
IOL Chemicals & Pharmaceuticals is faring well and the deep correction in its share price is another lucrative opportunity. A new grass root plant is expected to start soon. Buy before it zooms again.
Specialty steelmaker, Mukand Ltd., has sold 55 acres of surplus land in Thane for Rs. 801 cr. to repay its debt. It has also sold its 51% stake in Mukand Sumi for about Rs 714 cr. Buy for the long term.
Steel prices are rising globally. NMDC has raised its lump iron ore price by 5%. Both SAIL and NMDC are good shares to add at current prices.
IRCON is likely to declare bonus shares, as per information submitted to the exchanges. Add for the long term.
IDFC Bank to raise up to Rs. 3000 cr. via QIP at a floor price of Rs. 60.34. Although this scrip looks fully priced, it is a good long-term hold. Add.
Three more Rafale Jets taking the total to 14 enlarges the business opportunity for Reliance Infrastructure. It has also sold Reliance Centre for Rs. 1200 cr. to repay YES Bank debt. The company is on its way to become debt-free. Buy.
Varun Beverages, the Indian bottler of Pepsico, witnesses rising volumes. As per company estimates, it expects 20-22% volume growth during the next two years. Buy.
HAL has logged a mindboggling Rs. 22,700 cr. in top line on the back of IAF dues in spite of production cut and interruptions on account of Covid-19. A second interim dividend is likely followed by a bonus issue. Add.
HCC has won a case against NHAI and expects to get around Rs. 1259 cr. as conciliation proceeds. Positive for HCC.
Dixon Technologies has met the investment targets to become eligible for the 6% PLI incentives. A big positive. Price will rise substantially in a year. Buy.
Bharti Airtel and Vodafone Idea have failed to pay their AGR installment by 31st March 2021. Price may dip marginally. Stay away for some time.
Indraprastha Gas has signed a long-term gas supply deal with Delhi Transport Undertaking to supply CNG to its buses for 10 years. A big positive. Add.
Ashok Leyland reported robust sales of 15,761 units in India (up by 810%). Results for Q4 are likely to be verry good. Add.
Interglobe Aviation (Indigo Airlines) has started 14 new flights under the Udaan Scheme to avail of incentives to encourage operations from unserved and underserved airports, and keep airfares affordable. Positive for the Company.
Hawkins’ strong Q3 earnings and running at full capacity with new products, is expected to report a bumper Q4 and for the whole year too. Add.
Jubliant Food is being tipped to gain by about 35% from the current level on better working results. In the last three years, the Company has reported over 22% CAGR.
IZMO Ltd., a global leader in interactive marketing offering hi-tech automotive e-retailing solutions in North America, Europe, and Asia, has notched 36% higher Q3 EPS of Rs 6.3 and 179% higher 9MFY21 EPS of Rs 16.5, which could lead to FY21 EPS to Rs 23. The share may rise by over 100% in the medium to short term. Buy.
Bajaj Steel Industries producing machinery for all cotton ginning technologies has registered Q3 EPS of Rs 33.9 (FV Rs 5) and Rs 70 for 9MFY21, which could lead to FY21 EPS of Rs 100. It has already acquired land in Butibori, Nagpur for expansion. The share trading at a P/E of 4.4x is expected to double from the current level and is a bonus candidate. Buy.
LG Balakrishnan & Bros., the top supplier of Drive Chains with 70% market share and largest exporter to the US has achieved 93% higher Q3 EPS of Rs 17, which can lead to FY21 EPS of Rs 42 and to Rs 55 in FY22 on robust prospects of the auto sector. The share may advance by over 50% in the medium term. Buy.
Ajanta Soya produces Vanaspati and cooking oils with bakery products like biscuits, puffs, pastries and other applications for blue-chip clients has notched 250% higher Q3 EPS of Rs 4.8 and 93% higher 9MFY21 EPS of Rs 15.7 that could lead to FY21 EPS of Rs 21. The expansion completed in Dec 2020 may boost FY22 EPS to Rs 25. Buy for 50% gain.
Expleo Solutions, MNC from Expleo Group GMBH, posted Q3 EPS of Rs 12.3 and 9MFY21 EPS of Rs 38.5 is all set to garner FY21 EPS of Rs 60. This underpriced share has all the potential to touch the Rs 750 mark at a P/E of 12.5x in the medium term. Accumulate.
Debt-free Kalyani Steels from the $3 billion Kalyani Group, manufactures various components for commercial vehicles, two wheelers, diesel engines, bearings, tractors, turbines, defence and rail is set to garner FY21 EPS of Rs 40. Its share may touch Rs 450 mark. Buy.
Datamatics Global Services into global IT, Consulting, BPM and Data Management recently sold its 62.5% stake in Cignex for Rs 124 cr. and notched 112% higher Q3 EPS of Rs 3.8 (FV Rs 5). Reducing operating costs would result in a higher FY21 EPS of Rs 13 and the share can appreciate by 25% going forward. Buy.
Talbros Engineering, leading manufacturer of Axle Shafts for cars, trucks, tractors, etc. is a strong company with a share book value of Rs 124. The recovery in the auto sector will push its earnings going forward and is expected to notch FY21 EPS of Rs 20+. Buy.
Two decades-old, SP Apparels is a fully integrated manufacturer & exporter of knitted garments under the ‘Crocodile’ brand with 26 manufacturing facilities. With Q3 EPS of Rs 7.7 and 9MFY21 EPS of Rs 15, it is expected to notch FY21 EPS of Rs 23. The share could advance by 40% going forward. Add.
Brightcom Group, formerly Lycos Internet, engaged in providing digital marketing services, and the development of computer software and services with three major divisions of media, software services and future technologies may notch FY21 EPS of Rs 10. The share may rise 40%. Buy.
Cash surplus Welspun Corp has sold its plates and coil mills division to JSW Steel for Rs 848.5 cr. and sell its 43 MW power plant to Welspun Captive Power Generation for Rs 66.9 cr. Last week, it bagged a Rs 777 cr. order from the Middle East and expected to post Fy21 EPS of Rs 25. Shareholders can expect a hefty dividend. Buy.
Adani Group has been on a roll in FY21 with its stocks surging from 500% to 1000%. But Adani Power has been lagging behind. If sources are to be believed, its delisting will happen near its IPO price of Rs.150. Buy at every decline.
Digispice Technologies has corrected 50% from its peak and looks good for fresh investment. Its subsidiary, Spice Money, was recognized as one of the best BFSI brands by ET. Had it been a start-up, its valuation would have been around Rs.5000 cr. whereas it is available at a valuation of close to Rs.1000cr. A screaming buy.
Bajaj Steel Industries producing machinery for all cotton ginning technologies has registered Q3 EPS of Rs 33.9 (FV Rs 5) and Rs 70 for 9MFY21, which could lead to FY21 EPS of Rs 100. It has already acquired land in Butibori, Nagpur for expansion. The share trading at a P/E of 4.4x is expected to double from the current level and is a bonus candidate. Buy.
LG Balakrishnan & Bros., the top supplier of Drive Chains with 70% market share and largest exporter to the US has achieved 93% higher Q3 EPS of Rs 17, which can lead to FY21 EPS of Rs 42 and to Rs 55 in FY22 on robust prospects of the auto sector. The share may advance by over 50% in the medium term. Buy.
Ajanta Soya produces Vanaspati and cooking oils with bakery products like biscuits, puffs, pastries and other applications for blue-chip clients has notched 250% higher Q3 EPS of Rs 4.8 and 93% higher 9MFY21 EPS of Rs 15.7 that could lead to FY21 EPS of Rs 21. The expansion completed in Dec 2020 may boost FY22 EPS to Rs 25. Buy for 50% gain.
Expleo Solutions, MNC from Expleo Group GMBH, posted Q3 EPS of Rs 12.3 and 9MFY21 EPS of Rs 38.5 is all set to garner FY21 EPS of Rs 60. This underpriced share has all the potential to touch the Rs 750 mark at a P/E of 12.5x in the medium term. Accumulate.
Debt-free Kalyani Steels from the $3 billion Kalyani Group, manufactures various components for commercial vehicles, two wheelers, diesel engines, bearings, tractors, turbines, defence and rail is set to garner FY21 EPS of Rs 40. Its share may touch Rs 450 mark. Buy.
Datamatics Global Services into global IT, Consulting, BPM and Data Management recently sold its 62.5% stake in Cignex for Rs 124 cr. and notched 112% higher Q3 EPS of Rs 3.8 (FV Rs 5). Reducing operating costs would result in a higher FY21 EPS of Rs 13 and the share can appreciate by 25% going forward. Buy.
Talbros Engineering, leading manufacturer of Axle Shafts for cars, trucks, tractors, etc. is a strong company with a share book value of Rs 124. The recovery in the auto sector will push its earnings going forward and is expected to notch FY21 EPS of Rs 20+. Buy.
Two decades-old, SP Apparels is a fully integrated manufacturer & exporter of knitted garments under the ‘Crocodile’ brand with 26 manufacturing facilities. With Q3 EPS of Rs 7.7 and 9MFY21 EPS of Rs 15, it is expected to notch FY21 EPS of Rs 23. The share could advance by 40% going forward. Add.
Brightcom Group, formerly Lycos Internet, engaged in providing digital marketing services, and the development of computer software and services with three major divisions of media, software services and future technologies may notch FY21 EPS of Rs 10. The share may rise 40%. Buy.
Cash surplus Welspun Corp has sold its plates and coil mills division to JSW Steel for Rs 848.5 cr. and sell its 43 MW power plant to Welspun Captive Power Generation for Rs 66.9 cr. Last week, it bagged a Rs 777 cr. order from the Middle East and expected to post Fy21 EPS of Rs 25. Shareholders can expect a hefty dividend. Buy.
Adani Group has been on a roll in FY21 with its stocks surging from 500% to 1000%. But Adani Power has been lagging behind. If sources are to be believed, its delisting will happen near its IPO price of Rs.150. Buy at every decline.
Digispice Technologies has corrected 50% from its peak and looks good for fresh investment. Its subsidiary, Spice Money, was recognized as one of the best BFSI brands by ET. Had it been a start-up, its valuation would have been around Rs.5000 cr. whereas it is available at a valuation of close to Rs.1000cr. A screaming buy.
Jubiliant Ingrevia into speciality chemicals and life sciences chemicals was recently demerged from Jubiliant Lifesciences. It is a value buy around Rs.270 and can easily appreciate 50% from current levels. Compared to its nearest competitor; recently listed Laxmi Chemicals, the stock trades at nearly half the valuation.
Jubiliant Industries plans restructuring its agro and consumer division. Its consumer brand ‘Jivanjor’ adhesive competes with the likes of Fevicol. The stock can get rerated from the current levels and can easily double hereon.
Hemisphere Properties recently raised Rs.700 cr. to pay the stamp duty of its Delhi land bought from GoI. The stock is a goldmine and trades cheap at a market cap of just Rs.4000 cr. Buy for multi-bagger gains.
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Jubiliant Industries plans restructuring its agro and consumer division. Its consumer brand ‘Jivanjor’ adhesive competes with the likes of Fevicol. The stock can get rerated from the current levels and can easily double hereon.
Hemisphere Properties recently raised Rs.700 cr. to pay the stamp duty of its Delhi land bought from GoI. The stock is a goldmine and trades cheap at a market cap of just Rs.4000 cr. Buy for multi-bagger gains.
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This Telangana-based Government Company has a Monopoly in Supplying Ultra High Strength ‘METAL’ to ISRO for Building Rockets & Satellites. Check out http://wolfofdalalstreet.com/2021/04/01/this-telangana-based-government-company-has-a-monopoly-in-supplying-ultra-high-strength-metal-to-isro-for-building-rockets-satellites/
This Largest Indian Registrar & Transfer Agent of Mutual Funds Eyeing Double Digit Revenue & Profit Growth is a Unique Play On Structurally Growing Indian MF Industry. Check out http://wolfofdalalstreet.com/2021/04/02/this-largest-indian-registrar-transfer-agent-of-mutual-funds-eyeing-double-digit-revenue-profit-growth-is-a-unique-play-on-structurally-growing-indian-mf-industry/
Forwarded from Market Wizard
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*JSW Steel increased HRC prices by Rs 4,000/t for April delivery*
JSW Steel lifts HRC-CRC prices by a steep Rs 4,000-4,500/t for April 2021 delivery. The current HRC prices now stands at Rs 57,500-58,000/t and CRC price now stands at Rs 68,500 -69,000/t.
*Maintain Buy on JSW Steel*
Expect the others to follow the suit.
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JSW Steel lifts HRC-CRC prices by a steep Rs 4,000-4,500/t for April 2021 delivery. The current HRC prices now stands at Rs 57,500-58,000/t and CRC price now stands at Rs 68,500 -69,000/t.
*Maintain Buy on JSW Steel*
Expect the others to follow the suit.
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*Sail update*
SAIL recorded its best ever quarterly performance in both production and sales at 4.55 mnt as against 4.35mnt yoy and 4.27 mn t compared to 3.27mnt last year respectively in Q4 FY'21
The production and sales have improved by 4% and 3% respectively on quarterly basis
sail has been able to reduce the debt to Rs 35,330cr which is 31% lower yoy and less as compared to Rs 44,308cr in Q3FY21.
*View*
SAIL is poised for a structural improvement in operating performance, will also be aided by the improved and robust domestic fundamentals: “steel prices and increasing demand”. With significance capex behind, volume growth and EBITDA/Tonne improvement debt reduction is possible for SAIL.
Maintain buy on SAIL by valuing it at 5.5x EV/EBITDA with a target price of Rs 102/share
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SAIL recorded its best ever quarterly performance in both production and sales at 4.55 mnt as against 4.35mnt yoy and 4.27 mn t compared to 3.27mnt last year respectively in Q4 FY'21
The production and sales have improved by 4% and 3% respectively on quarterly basis
sail has been able to reduce the debt to Rs 35,330cr which is 31% lower yoy and less as compared to Rs 44,308cr in Q3FY21.
*View*
SAIL is poised for a structural improvement in operating performance, will also be aided by the improved and robust domestic fundamentals: “steel prices and increasing demand”. With significance capex behind, volume growth and EBITDA/Tonne improvement debt reduction is possible for SAIL.
Maintain buy on SAIL by valuing it at 5.5x EV/EBITDA with a target price of Rs 102/share
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*NA Class 8 Truck Orders March 2021 Sales - Improved*
(Nirmal Bang Retail Research)
US Class 8 Truck Orders came at 40000 vs YoY 7800 units (413%) and MoM 43800 units (-9%). MoM decline is in line with historical seasonal trend.
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(Nirmal Bang Retail Research)
US Class 8 Truck Orders came at 40000 vs YoY 7800 units (413%) and MoM 43800 units (-9%). MoM decline is in line with historical seasonal trend.
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*GHCL* - BUY
TP: ₹ 300 (pre Demerger)
Proven track record, better future prospects, very attractive valuation
Superb Q3 FY21
PBT - 150cr (+41% QoQ, +26% YoY)
PAT - 111cr (+41% QoQ, +9% YoY)
Soda Ash: Most efficient producer of Soda Ash, this division now operating at
95% Capacity utilisation - Demand pick up in key end user industries
Detergent industry continues to be least impacted by the pandemic.
Flat glass has almost recovered to pre-CoVID levels.
Home Textile:
Both spinning and home textiles have shown resilient performance driven by positive demand landscape.
Better pricing trends helping both the sub segments of Textiles. Focus on moving to value-added side of spinning to limit commodity price pressures
Reported EBITDA margin of 20.1%, which is highest ever margins in this business. Post Covid, Home Textile division is doing exceedingly well with best ever realisation and full order book
Update on Demerger
The Board approved a scheme of demerger where Textiles business of GHCL will be demerged into a separate Company
Shareholders of GHCL will be allotted shares in the new company in the swap ratio of 1:1, one share of Rs. 2 each for every share of Rs. 10 held in the GHCL
The Textile operations at GHCL is an integrated set up commencing from spinning of yarn to weaving, dyeing, printing and processing till the finished products like sheets & duvets take shape and are primarily exported worldwide
Company Profile
--GHCL is now the one of the largest manufacturer of Soda Ash in India at a single location, with 25% market share
--11 Lac MT Soda Ash Capacity
--45 MN MT Textile Processing Capacity
--1.85 Lac Spindle Capacity, 3320 Rotors, 5760 TFO Drums, 5 Air Jet Spinning Machines
--95% Capacity utilisation
--60,000 MT capacity for manufacturing Sodium Bicarbonate
--GHCL is the only company in India to have its own lignite mines
--The company has its own limestone reserve, which is located at a distance of 40 kms from the plant. https://t.me/marketswizard
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TP: ₹ 300 (pre Demerger)
Proven track record, better future prospects, very attractive valuation
Superb Q3 FY21
PBT - 150cr (+41% QoQ, +26% YoY)
PAT - 111cr (+41% QoQ, +9% YoY)
Soda Ash: Most efficient producer of Soda Ash, this division now operating at
95% Capacity utilisation - Demand pick up in key end user industries
Detergent industry continues to be least impacted by the pandemic.
Flat glass has almost recovered to pre-CoVID levels.
Home Textile:
Both spinning and home textiles have shown resilient performance driven by positive demand landscape.
Better pricing trends helping both the sub segments of Textiles. Focus on moving to value-added side of spinning to limit commodity price pressures
Reported EBITDA margin of 20.1%, which is highest ever margins in this business. Post Covid, Home Textile division is doing exceedingly well with best ever realisation and full order book
Update on Demerger
The Board approved a scheme of demerger where Textiles business of GHCL will be demerged into a separate Company
Shareholders of GHCL will be allotted shares in the new company in the swap ratio of 1:1, one share of Rs. 2 each for every share of Rs. 10 held in the GHCL
The Textile operations at GHCL is an integrated set up commencing from spinning of yarn to weaving, dyeing, printing and processing till the finished products like sheets & duvets take shape and are primarily exported worldwide
Company Profile
--GHCL is now the one of the largest manufacturer of Soda Ash in India at a single location, with 25% market share
--11 Lac MT Soda Ash Capacity
--45 MN MT Textile Processing Capacity
--1.85 Lac Spindle Capacity, 3320 Rotors, 5760 TFO Drums, 5 Air Jet Spinning Machines
--95% Capacity utilisation
--60,000 MT capacity for manufacturing Sodium Bicarbonate
--GHCL is the only company in India to have its own lignite mines
--The company has its own limestone reserve, which is located at a distance of 40 kms from the plant. https://t.me/marketswizard
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Brokers naturally recommend largecaps like Tata Steel JSW. However, Denofwealth is confident that SARDA ENERGY (TP:₹600)should give much higher appreciation. 120 MW Hydel power plant to commence power generation anyday.
https://m.economictimes.com/markets/stocks/news/steel-stocks-rally-has-more-steam-left-says-clsa/articleshow/81756078.cms
https://m.economictimes.com/markets/stocks/news/steel-stocks-rally-has-more-steam-left-says-clsa/articleshow/81756078.cms
The Economic Times
Rally in steel stocks may continue: CLSA
CLSA continues to prefer Tata Steel in the steel sector.
*💰 PRECOT - ONLY AT NSE CMP 110💰*
Tdg @ 3.5xFY22EEPS and 0.40xBook TP~ Rs 250
🎯 _*Stock tdg @ 120 cr mcap Vs FY22E Ebidta of 120 Cr.*_
*📚BV: ₹253*
*💰Capacity: 195,000 spindles* Decent size (₹650-700cr annual turnover)
🏮Apart from cotton yarn, company into *TECHNICAL TEXTILES.* This TTD division mainly serves healthcare and hygiene sector which are witnessing strong growth🚀
*🎐IMPROVED PERFORMANCE✈️*
🚀Q2FY21 EBITDA ₹21cr v/s ₹4cr QoQ, ₹8cr YoY
🚀Q2FY21 Profit ₹5.6cr v/s (₹11cr) loss QoQ, (₹12cr) YoY
✅EBIDTA margin 12% vs 4.5% (YoY and QoQ)
*Precot Q3*
🚀🚀 _*EBITDA 25.5cr vs 22.4cr (+14% QoQ) vs 8cr (+219% YoY)*_
🚀🚀PAT 9.4cr vs 5.6cr (+68% QoQ)vs *2cr loss* YoY
🚀🚀EPS ₹ 7.85 vs 4.67 (+68% QoQ)vs *(-1.74)* YoY
*With such improvement , can expect super bumper FY22 as yarn prices further up*
Precot had traded at ₹ 250/ when Sensex was one-third of current level
Personal due diligence advised. TP subject to MKT condition
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Tdg @ 3.5xFY22EEPS and 0.40xBook TP~ Rs 250
🎯 _*Stock tdg @ 120 cr mcap Vs FY22E Ebidta of 120 Cr.*_
*📚BV: ₹253*
*💰Capacity: 195,000 spindles* Decent size (₹650-700cr annual turnover)
🏮Apart from cotton yarn, company into *TECHNICAL TEXTILES.* This TTD division mainly serves healthcare and hygiene sector which are witnessing strong growth🚀
*🎐IMPROVED PERFORMANCE✈️*
🚀Q2FY21 EBITDA ₹21cr v/s ₹4cr QoQ, ₹8cr YoY
🚀Q2FY21 Profit ₹5.6cr v/s (₹11cr) loss QoQ, (₹12cr) YoY
✅EBIDTA margin 12% vs 4.5% (YoY and QoQ)
*Precot Q3*
🚀🚀 _*EBITDA 25.5cr vs 22.4cr (+14% QoQ) vs 8cr (+219% YoY)*_
🚀🚀PAT 9.4cr vs 5.6cr (+68% QoQ)vs *2cr loss* YoY
🚀🚀EPS ₹ 7.85 vs 4.67 (+68% QoQ)vs *(-1.74)* YoY
*With such improvement , can expect super bumper FY22 as yarn prices further up*
Precot had traded at ₹ 250/ when Sensex was one-third of current level
Personal due diligence advised. TP subject to MKT condition
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*Technocraft India (CMP 390): Diversified with Sturdy outlook* (Must read)
Target price: 600🎯
*Technocraft India has 4 segments*:🔰
1. Drum closures
2. Cotton Textiles
3. Scaffolding’s and frameworks
4. Engineering and design services:
a) Embedded systems & IoT
b) ITeS
c) Electronics design services
*Financials:*
✅Technocraft India has notched up an EPS of ₹17 for the quarter ended 31st December 2020.
✅Decent sized company having annual turnover of 1,300 crore
✅ Book value: ₹400🔱 (Tdg @1.0xBV)
✅ Low floating stock: Only 16% (75% promoter holding, 8.5% held by funds/foreign corporates)
*Segment wise outlook:*
🔑Scaffoldings and frameworks division has strong prospects due to *anticipated growth in Infrastructure and Affordable housing construction* demand in India post Covid.
🔑Company has made *significant structural changes* to its textile division. Company’s *Grey Cotton Yarn operations are now based in Amravati which is cotton growing area and has cost effective operations* and has generated a positive EBITDA in FY 2020-21. In Murbad, company now produces only value added *high margin products like Melange Yarn and Fabric*. These are also generating a *positive EBITDA* in FY 2020-21.
🔑Going forward, company expects the demand for its services in the engineering division to be significantly increasing due to the *WFH trend globally and strong acceptance of company’s offshore global delivery model.*
🔑 Demand for steel drums being *essential products carrying* medicines, food etc. continued to go up and this led to an increase in demand for Drum closures globally.
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Target price: 600🎯
*Technocraft India has 4 segments*:🔰
1. Drum closures
2. Cotton Textiles
3. Scaffolding’s and frameworks
4. Engineering and design services:
a) Embedded systems & IoT
b) ITeS
c) Electronics design services
*Financials:*
✅Technocraft India has notched up an EPS of ₹17 for the quarter ended 31st December 2020.
✅Decent sized company having annual turnover of 1,300 crore
✅ Book value: ₹400🔱 (Tdg @1.0xBV)
✅ Low floating stock: Only 16% (75% promoter holding, 8.5% held by funds/foreign corporates)
*Segment wise outlook:*
🔑Scaffoldings and frameworks division has strong prospects due to *anticipated growth in Infrastructure and Affordable housing construction* demand in India post Covid.
🔑Company has made *significant structural changes* to its textile division. Company’s *Grey Cotton Yarn operations are now based in Amravati which is cotton growing area and has cost effective operations* and has generated a positive EBITDA in FY 2020-21. In Murbad, company now produces only value added *high margin products like Melange Yarn and Fabric*. These are also generating a *positive EBITDA* in FY 2020-21.
🔑Going forward, company expects the demand for its services in the engineering division to be significantly increasing due to the *WFH trend globally and strong acceptance of company’s offshore global delivery model.*
🔑 Demand for steel drums being *essential products carrying* medicines, food etc. continued to go up and this led to an increase in demand for Drum closures globally.
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