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MARKET WIZARD NEWSLETTER ISSUE 18.pdf
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📑 Ⓜ️ARKET WIZARD
🌐 NEWSLETTER ISSUE 18
📊📊 FUNDAMENTAL STOCKS
📍SUNDARAM BRAKES LINING LTD
📍ALEMBIC PHARMACEUTICALS LTD
📍 BOMBAY BUMRAH TRADING CORPORATION - SPECIAL PICK
📍 VOLTAS LIMITED
📈📉 TECHNICAL STOCKS
📍ASIAN HOTELS EAST
📍 CEREBRA INTEGRATED TECHNOLOGIES LIMITED
📍 ESSAR SHIPPING LTD
📍 GANESH HOUSING CORPORATION LIMITED
📍JINDAL WORLDWIDE LTD
🎯 TEAM MARKET WIZARD
🌐 NEWSLETTER ISSUE 18
📊📊 FUNDAMENTAL STOCKS
📍SUNDARAM BRAKES LINING LTD
📍ALEMBIC PHARMACEUTICALS LTD
📍 BOMBAY BUMRAH TRADING CORPORATION - SPECIAL PICK
📍 VOLTAS LIMITED
📈📉 TECHNICAL STOCKS
📍ASIAN HOTELS EAST
📍 CEREBRA INTEGRATED TECHNOLOGIES LIMITED
📍 ESSAR SHIPPING LTD
📍 GANESH HOUSING CORPORATION LIMITED
📍JINDAL WORLDWIDE LTD
🎯 TEAM MARKET WIZARD
Market Wizard
FREE FINANCIAL EDUCATIONAL TELEGRAM CHANNEL
Disclaimer : This channel DOES NOT provide any stock market related advice or recommendation
All the posts appearing in the channel are only for educational and informational purposes.
ALL RIGHTS RESERVED!!!
https://t.me/marketswizard
FREE FINANCIAL EDUCATIONAL TELEGRAM CHANNEL
Disclaimer : This channel DOES NOT provide any stock market related advice or recommendation
All the posts appearing in the channel are only for educational and informational purposes.
ALL RIGHTS RESERVED!!!
https://t.me/marketswizard
Telegram
Market Wizard
FREE FINANCIAL EDUCATIONAL CHANNEL
Disclaimer : We are not SEBI Registered. Please consult your financial advisor before investing.
All the posts appearing in the channel are only for educational and informational purposes.
ALL RIGHTS RESERVED!!!
Disclaimer : We are not SEBI Registered. Please consult your financial advisor before investing.
All the posts appearing in the channel are only for educational and informational purposes.
ALL RIGHTS RESERVED!!!
While IPOs have been hot all of last year, no IPO has generated a buzz like Zomato. While the increased demand, improved metrics in FY21 are discussed, the question remains on the high valuation ask. We did some number crunching on what the expected Market cap implies:
The IPO price band of Rs 72-76 implies market cap of Rs 55,000-60,000 crores!
When the market is fully mature, it can trade at 25x MCap/EBITDA (looking at global peers), implying an annual EBITDA expectation of ~Rs 2,500 cr
At an estimated overhead cost of Rs 2,000 cr, it implies Zomato needs to earn contribution profit of Rs 4,500 cr annually at full scale
Contribution margin (CM) per order of Rs 20/ share (generally 5% of average order value – was Rs 16/ order for 4QFY21)
At Rs 20 CM per order, Zomato will need 225 cr orders to generate that EBITDA (for reference they have done 40 cr orders in their best year FY20)
Assuming 40% market share for Zomato (competition from Swiggy and restaurants having their own delivery set-ups now), it implies 560 cr food delivery orders per year across India
This means 11 crores households (out of total 25 crores) or 45% of the country will need to order once a week to reach this number!
The IPO price band of Rs 72-76 implies market cap of Rs 55,000-60,000 crores!
When the market is fully mature, it can trade at 25x MCap/EBITDA (looking at global peers), implying an annual EBITDA expectation of ~Rs 2,500 cr
At an estimated overhead cost of Rs 2,000 cr, it implies Zomato needs to earn contribution profit of Rs 4,500 cr annually at full scale
Contribution margin (CM) per order of Rs 20/ share (generally 5% of average order value – was Rs 16/ order for 4QFY21)
At Rs 20 CM per order, Zomato will need 225 cr orders to generate that EBITDA (for reference they have done 40 cr orders in their best year FY20)
Assuming 40% market share for Zomato (competition from Swiggy and restaurants having their own delivery set-ups now), it implies 560 cr food delivery orders per year across India
This means 11 crores households (out of total 25 crores) or 45% of the country will need to order once a week to reach this number!
Zomato’s IPO valuation of 4X GMV and 25X Revenues for FY22E is significantly higher than:
Delivery Hero, a leader in over 35 of the 40 emerging markets, is at <1X GMV and 7X Revenues
Meituan, China’s largest FoodTech (~65% share) is at 1.5X GMV and 6X Sales
Doordash, US’s largest player, is at 1.5X GMV and 14X Sales.
Delivery Hero, a leader in over 35 of the 40 emerging markets, is at <1X GMV and 7X Revenues
Meituan, China’s largest FoodTech (~65% share) is at 1.5X GMV and 6X Sales
Doordash, US’s largest player, is at 1.5X GMV and 14X Sales.
*Jindal Polyfilms - _BUY TP ₹1700_*
Short term TP 1300
*ROE of more than 35%*
ROCE of 33%
Book Value - ₹ 603
*Conservative FY22 Estimates*
▫️Revenue - 4925cr ▫️PAT - 985cr ▫️EPS - ₹225
*Co is trading at just 4x Forward P/E* (Cannot get any cheaper)
*FY21 Highlights*
▪️Revenue - 4082cr ▪️PAT - 791cr ▪️EPS - ₹181
▫️Operating margins have increased sharply to 27% vs 18% (+900 bps YoY)
▫️Co has Reduced Debt significantly during FY21
▪️ *Co operates in the booming Packaging Films industry and is the largest player. FY22 and FY23 will be the best ever in cos history.*
▪️ *Co is trading extremely cheap at Forward P/E of just 3.5x even on conservative estimates.*
▪️ *Even if it manages to get a very modest P/E of 7.5x, stock price will easily cross _₹1700_ on a conservative basis.*
_To give a perspective on valuations, Cosmo Films which is a smaller peer is already trading at 7.5x Forward P/E. Jindal Poly being the largest player deserves much higher valuation multiples than smaller ones._
*DO NOT MISS. HIGH CONVICTION IDEA*
*BEST YET TO COME*
Short term TP 1300
*ROE of more than 35%*
ROCE of 33%
Book Value - ₹ 603
*Conservative FY22 Estimates*
▫️Revenue - 4925cr ▫️PAT - 985cr ▫️EPS - ₹225
*Co is trading at just 4x Forward P/E* (Cannot get any cheaper)
*FY21 Highlights*
▪️Revenue - 4082cr ▪️PAT - 791cr ▪️EPS - ₹181
▫️Operating margins have increased sharply to 27% vs 18% (+900 bps YoY)
▫️Co has Reduced Debt significantly during FY21
▪️ *Co operates in the booming Packaging Films industry and is the largest player. FY22 and FY23 will be the best ever in cos history.*
▪️ *Co is trading extremely cheap at Forward P/E of just 3.5x even on conservative estimates.*
▪️ *Even if it manages to get a very modest P/E of 7.5x, stock price will easily cross _₹1700_ on a conservative basis.*
_To give a perspective on valuations, Cosmo Films which is a smaller peer is already trading at 7.5x Forward P/E. Jindal Poly being the largest player deserves much higher valuation multiples than smaller ones._
*DO NOT MISS. HIGH CONVICTION IDEA*
*BEST YET TO COME*
Marcellus: The Three Ps of a Global Little Champ
Little Champs portfolio companies’ dominant position in their niche markets forms the key basis for their superior pricing power, profitability, RoCE and free cashflow generation vs. peers. However, a key pitfall of ‘niche focus’ is a high probability of hitting a growth ceiling after reaching a dominant position in a niche industry – a concern often raised for Little Champs and more generally for B2B companies. Our Little Champs are successfully mitigating these growth concerns through their globalisation strategy – nearly 50% of the non-Financial portfolio companies now derive more than 25% of their revenues from outside India. More importantly, these global forays are based on product innovations, process improvements and people management, clearly more enduring moats than competitive pricing. Besides a significant growth runway, globalisation gives the Little Champs learnings which further enhance their domestic market dominance.
https://lnkd.in/d6wFAcM
#markets #growth #strategy
Little Champs portfolio companies’ dominant position in their niche markets forms the key basis for their superior pricing power, profitability, RoCE and free cashflow generation vs. peers. However, a key pitfall of ‘niche focus’ is a high probability of hitting a growth ceiling after reaching a dominant position in a niche industry – a concern often raised for Little Champs and more generally for B2B companies. Our Little Champs are successfully mitigating these growth concerns through their globalisation strategy – nearly 50% of the non-Financial portfolio companies now derive more than 25% of their revenues from outside India. More importantly, these global forays are based on product innovations, process improvements and people management, clearly more enduring moats than competitive pricing. Besides a significant growth runway, globalisation gives the Little Champs learnings which further enhance their domestic market dominance.
https://lnkd.in/d6wFAcM
#markets #growth #strategy
Marcellus
The Three Ps of a Global Little Champ - Marcellus
Little Champs portfolio companies’ dominant position in their niche markets forms the key basis for their superior pricing power, profitability, RoCE and free cashflow generation vs. peers. However, a key pitfall of ‘niche focus’ is a high probability of…
Stocks To Watch
Maruti Suzuki India: Launched Maruti Suzuki Smart Finance, a digital end-to-end online car financing platform.
Nocil: The company gave a brief of its performance in its annual report. The lockdowns resulted in sub-optimal operations during the first quarter of the year under review with operating rates falling below 50% than the preceding quarter. The company recorded a turnover of Rs 939 crore, a growth of over 9% over the last year.
Quess Corp: Increased its stake in Stellarslog Technovation from 16.12% to 33.33% by investing Rs 3.20 crore
Anjani Portland Cement: Purchased additional shares in Bhavya Cements, increasing shareholding in the company to 89.15%.
Canara Bank: Launched its annual report and said the outlook for financial year 2021-22 is positive with expectation of economic recovery gaining momentum, particularly in the second half of the year, with broad based normalization of economic activity and continued policy support from the government and the RBI.
Wockhardt: Ended the year with profit after tax of Rs 686 crore as compared to a loss of Rs 69 crore in the previous year. Also reduced the net debt to equity ratio to 0.54 from 0.96
Federal Bank: Re-appointed Shyam Srinivasan as managing director & CEO of the bank for three years with effect from September 23, 2021.
Hero MotoCorp: Ended the financial year with net profit of Rs 2,964 crore, down nearly 18.5%. Exports grew 142% in Africa and Middle-East, with 7.5% growth in overall exports. The company also crossed 100 million units milestone in cumulative production and sales.
Apcotex Industries: Appointed Sachin Karwa as the Chief Financial Officer. Karwa will replace Suraj Badale, who will continue to work as DGM – Accounts.
IRCTC: To restore Lucknow- New Delhi Tejas Express train service from August 7 for 4 days a week.
Container Corporation of India: Q1 total volumes rise 35.4% year-on-year to 9,91,746.
Equitas Small Finance Bank: Got RBI nod to apply for amalgamation Plan
Bajaj Auto: Omkar Goswami resigns as an independent director of Bajaj Auto and Bajaj Finance
Adani Ports: Board to consider raising up to $750 million in USD bonds
Earnings to watch: Authum Investment and Infrastructure, HFCL, HMT, Steel Strips Wheels
Maruti Suzuki India: Launched Maruti Suzuki Smart Finance, a digital end-to-end online car financing platform.
Nocil: The company gave a brief of its performance in its annual report. The lockdowns resulted in sub-optimal operations during the first quarter of the year under review with operating rates falling below 50% than the preceding quarter. The company recorded a turnover of Rs 939 crore, a growth of over 9% over the last year.
Quess Corp: Increased its stake in Stellarslog Technovation from 16.12% to 33.33% by investing Rs 3.20 crore
Anjani Portland Cement: Purchased additional shares in Bhavya Cements, increasing shareholding in the company to 89.15%.
Canara Bank: Launched its annual report and said the outlook for financial year 2021-22 is positive with expectation of economic recovery gaining momentum, particularly in the second half of the year, with broad based normalization of economic activity and continued policy support from the government and the RBI.
Wockhardt: Ended the year with profit after tax of Rs 686 crore as compared to a loss of Rs 69 crore in the previous year. Also reduced the net debt to equity ratio to 0.54 from 0.96
Federal Bank: Re-appointed Shyam Srinivasan as managing director & CEO of the bank for three years with effect from September 23, 2021.
Hero MotoCorp: Ended the financial year with net profit of Rs 2,964 crore, down nearly 18.5%. Exports grew 142% in Africa and Middle-East, with 7.5% growth in overall exports. The company also crossed 100 million units milestone in cumulative production and sales.
Apcotex Industries: Appointed Sachin Karwa as the Chief Financial Officer. Karwa will replace Suraj Badale, who will continue to work as DGM – Accounts.
IRCTC: To restore Lucknow- New Delhi Tejas Express train service from August 7 for 4 days a week.
Container Corporation of India: Q1 total volumes rise 35.4% year-on-year to 9,91,746.
Equitas Small Finance Bank: Got RBI nod to apply for amalgamation Plan
Bajaj Auto: Omkar Goswami resigns as an independent director of Bajaj Auto and Bajaj Finance
Adani Ports: Board to consider raising up to $750 million in USD bonds
Earnings to watch: Authum Investment and Infrastructure, HFCL, HMT, Steel Strips Wheels
World Markets
Dow + 448
Nasdaq + 142
Dax + 267
Nikkei + 596
Hangseng + 261
Sgxnifty + 80 (15801)
Brent Crude 75.63
Dow Fut - 17
Dollar Index 92.11
Dow + 448
Nasdaq + 142
Dax + 267
Nikkei + 596
Hangseng + 261
Sgxnifty + 80 (15801)
Brent Crude 75.63
Dow Fut - 17
Dollar Index 92.11
Avadh Sugar :
ICICI Direct said Avadh has a sizable sugar & ethanol capacity and is also further increasing its distillery capacity to utilise B-heavy route for producing ethanol. With the increasing clarity on global sugar prices and ethanol blending programme, a sugar inventory reduction is imminent. It has changed its cautious stance on the company given strong earnings growth and free cash flow visibility.
It has a revised target price of ₹685/share (earlier ₹345) and has changed its recommendation from HOLD to BUY.
ICICI Direct said Avadh has a sizable sugar & ethanol capacity and is also further increasing its distillery capacity to utilise B-heavy route for producing ethanol. With the increasing clarity on global sugar prices and ethanol blending programme, a sugar inventory reduction is imminent. It has changed its cautious stance on the company given strong earnings growth and free cash flow visibility.
It has a revised target price of ₹685/share (earlier ₹345) and has changed its recommendation from HOLD to BUY.
💻⌨🖥🖨🖲🕹💻⌨🖥🖨🕹
⭕️ *AURION PRO*
CMP 159.45
💼 Aurion pro Re-rating candidate 🚀🚀
💻 Aurion pro is leader in Small IT company
🖲 Monday Huge movement Possible ✈️
🕹 All small IT stocks run big way last few months ( Steam still left ) ✈️
🖨 Book value 276 rs per share ✈️
🖥 DII 38 % holding ( Boost company )✈️
⌨ Superb Management ✈️
💻⌨🖥🖨🖲🕹💻⌨🖥🖨🕹
⭕️ *AURION PRO*
CMP 159.45
💼 Aurion pro Re-rating candidate 🚀🚀
💻 Aurion pro is leader in Small IT company
🖲 Monday Huge movement Possible ✈️
🕹 All small IT stocks run big way last few months ( Steam still left ) ✈️
🖨 Book value 276 rs per share ✈️
🖥 DII 38 % holding ( Boost company )✈️
⌨ Superb Management ✈️
💻⌨🖥🖨🖲🕹💻⌨🖥🖨🕹
Caustic soda companies increase prices to 1400/- ex factory landed cost almost 1500/- current local prices 1475/- up from bottom 1300/- in a month
Good for caustic manufacturing GACL Chemfab Alkalies DCM Shriram Grasim Meghmani Andhra sugar
Good for caustic manufacturing GACL Chemfab Alkalies DCM Shriram Grasim Meghmani Andhra sugar
Who’s Meeting Whom
IRCTC: To meet Madhu Kela, CIO from Cohesion Fund M K Trust on July 14 and Dhawal Mehta of Somerset Capital Management Singapore on July 13
IRCTC: To meet Madhu Kela, CIO from Cohesion Fund M K Trust on July 14 and Dhawal Mehta of Somerset Capital Management Singapore on July 13