Ganesh Chaturthi 2021 - Investment Ideas
When it comes to anything auspicious like buying a new house or kids wedding, we start the event with Ganesh Pooja or write Shree Ganeshaya Namah on invitation cards. So how about building the investment portfolio this Ganesh Chaturthi?
While the whole nation will be busy celebrating Ganesh Chaturthi 2021, the festival also gives a chance to the people to take inspiration from Lord Ganesha and grow their wealth. Through building their portfolio an individual can become a successful investor in the future.
So, gear up and invest in a mix of stocks and mutual funds to earn magnificent returns in the long run. Based on financial performance, management, business outlook and valuations, 5paisa has selected the following 3 stocks for long-term investment.
- CMP: Rs 116
- Target: Rs 145
- Upside: 25%
We are positive on the stock on account of company’s vision to scale up clean and green capacity, diversify in distribution, and offer ancillary solutions to consumers. NTPC’s target of achieving 60GW RE capacity by 2032 is intact for which it would set up large solar parks, tie-ups with other PSUs, etc. Further, in the medium-to-long term, it plans to diversify into power distribution. It would also offer ancillary services such as EV charging, through setting up infra on its own and via JVs. Such initiatives are aimed at making its business model sustainable in the ESG context. We expect revenue and PAT CAGR of 9.3% and 10.2% respectively over FY21-23E.
|
Year |
Net Sales (Rs Cr) |
OPM (%) |
Pre Exp PAT (Rs Cr) |
Pre Exp EPS (Rs) |
PE (x) |
|
FY21 |
100,986 |
30.3 |
15,132 |
15.6 |
7.4 |
|
FY22E |
112,401 |
31.7 |
15,267 |
15.7 |
7.4 |
|
FY23E |
120,727 |
31.7 |
16,735 |
17.3 |
6.7 |
Source: 5paisa Research, Price and valuations as on September 07, 2021
- CMP: Rs6,848
- Target: Rs8,375
- Upside:22%
Demand for cars has seen a rebound, after a blip in 1QFY22 (Covid 2nd wave). However, the pace of bounce-back is somewhat slower than 2020. Management mentioned that order-book remains healthy at ~170k units. Recovery is driven by both rural and urban markets, unlike 2020, when it was led by rural. Key catalysts for the stock would be normalisation of end-demand (possibly by festive season) and margin improvement led by pricing or fall in commodity prices. The global chip-shortage issue is likely to persist this year. However, Maruti has been able to navigate this crisis through various measures. We expect revenue and PAT CAGR of 9.3% and 10.2% respectively over FY21-23E.
|
Year |
Net Sales (Rs Cr) |
OPM (%) |
Pre Exp PAT (Rs Cr) |
Pre Exp EPS (Rs) |
PE (x) |
|
FY21 |
70,332 |
7.6% |
4,229 |
140.0 |
48.9 |
|
FY22E |
90,951 |
7.8% |
4,924 |
163.0 |
42.0 |
|
FY23E |
106,842 |
10.5% |
7,949 |
263.2 |
26.0 |
Source: 5paisa Research, Price and valuations as on September 07, 2021
State Bank of India (SBIN’s)
SBIN’s asset quality remains under control and it has a well-provided corporate NPL portfolio as well. Additional balance sheet provisions of Rs298.16bn or 123bps of loans should cushion earnings going forward, in the event of higher than anticipated stress. The standalone Bank trades at a valuation of 0.9x FY23ii BVPS, which seems favourable given the gradual improvement in earnings expected going forward.
|
Year |
NII (Rs Cr) |
Pre Exp PAT (Rs Cr) |
EPS (Rs) |
P/BV (x) |
|
FY21 |
122,110 |
21,040 |
23.6 |
1.4 |
|
FY22E |
143,340 |
35,280 |
39.5 |
1.3 |
|
FY23E |
162,790 |
39,840 |
44.6 |
1.1 |
Source: 5paisa Research, Price and valuations as on September 07, 2021
Mutual Fund Recommendations:
ICICI Prudential Balanced Advantage Fund (G):
Launched on December 30, 2006, ICICI Prudential Balanced Advantage Fund is an open ended dynamic asset allocation fund. The Scheme uses an in-house asset allocation model to maintain an effective equity investment level to be above 65%. However, the actual equity level may go below 65% after considering the derivative exposure.
The Scheme is suitable for investors who are seeking to benefit out of market volatility while maintaining fair equity allocation levels based on market valuations. Investors who wish to participate in equity markets with relatively conservative approach can invest in this scheme.
HDFC Floating Rate Debt Fund (G):
An open ended debt scheme predominantly investing in floating rate instruments (including fixed rate instruments converted to floating rate exposures using swaps/derivatives).
The Fund will invest in a portfolio comprising substantially of floating rate debt, fixed rate debt instruments swapped for floating rate returns and money market instruments.
The Scheme shall endeavour to develop a well-diversified portfolio of debt (including securitised debt) and other instruments. Investment in debt securities will be guided by credit quality, liquidity, interest rates and their outlook.
|
Scheme Name |
Fund Manager |
AUM (Cr.) |
1 Year (%) |
3 Years CAGR (%) |
5 Years CAGR (%) |
|
HDFC Floating Rate Debt Fund(G) |
Shobhit Mehrotra |
22,077 |
6.04 |
7.84 |
7.52 |
|
ICICI Pru Balanced Advantage Fund(G) |
Manish Banthia |
33,528 |
25.79 |
11.89 |
10.50 |
Fund Performance
Source: Ace MF, Latest available AUM
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