5 stocks to buy post Union Budget 2018

5 stocks to buy post Union Budget 2018
by Nikita Bhoota 02/09/2018
Untitled Document

The last full Union Budget 2018 of the Modi Government declared on February 1 have disappointed a few classes, leaving investors to reconsider their investment decisions. The Government has imposed Long Term Capital Gain Tax (LTCG) tax on equity gains above Rs1lakh at the rate of 10%, without indexation benefit. In addition, the government has proposed to implement Dividend Distribution Tax (DDT) of 10% on Equity Mutual Funds. These announcements in the budget was not at par with the market expectations. This adversely impacted the index performance. However, the declaration of LTCG and DDT is likely to be a short term negative for D-Street.

Post correction phase, the attention will be back on earnings outcome. Further, the budget largely focused on development of infrastructure, healthcare and rural economy. Stocks from agri, auto ancillary, healthcare and infrastructure are likely to be next big triggers. Based on the fundamentals, unique product portfolio and management outlook, following are the stocks that offer a promising return.

Godrej Agrovet

Godrej Agrovet (GAL) is a diversified agri-business company having presence in segments like animal feed (~53% revenue contribution in FY17), vegetable oil (~10%), crop protection (~16%) and dairy products (~21%). It enjoys advantage over its peers through established brand image. We expect revenue CAGR of 14% over FY17-20E backed by increase in market share of organized sector in animal feed and vegetable oil segment. Besides GAL focus on export market for expanding its crop protection segment by launch of new generic chemicals backed by Astec Life Sciences (~57% stake) will also aid revenues. Improving consumption of dairy and rising share of organized market in dairy business also augurs well for the company. We see EBITDA margin to expand by ~157bps over FY17-20E backed by utilization level of ~47% (FY17) which provides operating leverage. We expect PAT CAGR of 20% over FY17-20E. We see an upside of 30% from CMP of Rs563 over a period of 1 year.

Year

Net Sales (Rs Cr)

OPM (%)

Net Profit (Rs Cr)

EPS (Rs)

PE (x)

FY17

4,911

8.9

266

14.4

-

FY18E

5,652

9.6

311

16.8

33.5

FY19E

6,356

9.9

373

20.1

28.0

FY20E

7,293

10.5

464

25.0

22.5

Source: 5paisa Research

Tejas Network

Tejas Networks Ltd (TNL) is the second largest company in the Indian optical equipment market. It sells products to internet service providers and telecom, defence companies and Government entities. TNL would be a beneficiary of increased data traffic for telecom operators, thus requiring continuous optical capex in a bid to remain competitive in an increasing competition environment. It also stands to benefit from being the only Indian optical network equipment company. Government’s capex under initiatives like BharatNet Project should aid its revenues as project SPV, Bharat Broadband Network Ltd, is a key contributor to TNL’s revenues. Allocated spends of Rs 10,000cr on the project in this Budget would also support revenue growth. TNL has advantages vs. global companies owing to low cost manufacturing. Higher revenue growth and resultant operating leverage should aid EBITDA margins. Overall, we estimate revenue CAGR of 19.8%, EBITDA margin expanding by ~411bps and PAT growing at 33.5% CAGR over FY17-20E. We estimate an upside of 32% from CMP of Rs368 over a period of 1 year.

Year

Net Sales (Rs Cr)

OPM (%)

Net Profit (Rs Cr)

EPS (Rs)

PE (x)

FY17

878

19.8

88

9.8

37.4

FY18E

1,099

22.3

128

14.3

25.7

FY19E

1,298

23.2

172

19.2

19.2

FY20E

1,510

23.9

209

23.3

15.8

Source: 5paisa Research

JK Tyre & Industries

JKTIL is leading Indian Truck and Bus Radial (TBR) and LCV tyres manufacturer with 31% market share and capacity of 32mn tyres/annum (tpa). It derives 56% revenue from replacement segment, 34% from OEMs (standalone plus Cavendish) and 10% from exports (Tornel, Mexico, capacity 7.9mn tpa). After reporting operating losses in H1FY18, JKTIL is expected to perform better in H2FY18 due to stable rubber prices and cost control initiatives. Rubber (RSS-4) prices peaked at Rs150/kg in March 2017 and have stabilized in the range of Rs130-135. We expect company to post positive EBITDA in FY18, however, rising crude prices are a concern.  The budget announcement of raising customs duty on TBR from 10% to 15% will make imports costlier, boosting volumes for JKTIL. Imposition of anti-dumping duty on Chinese TBR tyres, Government’s thrust on infrastructure and better consumer financing will result in strong CV sales, propelling JKTIL’s volumes. Hence, we expect revenue growth of 12% yoy in FY19E vs. 6% in FY18. After spending Rs3,700cr on capex (past 3 years), only maintenance capex of Rs100cr/year would be incurred over next 2-3 years. This will reduce D/E ratio from 3x in FY17 to 1.6x in FY20E. We see an upside of 40% from CMP of Rs167 over a period of 1 year.

Year

Net Sales (Rs Cr)

OPM (%)

Net Profit (Rs Cr) (before EO)

EPS (Rs)

PE (x)

FY17

7,689

14.7

306

13.5

13.0

FY18E

8,151

8.8

94

4.1

42.2

FY19E

9,129

13.7

440

19.4

9.0

FY20E

10,224

15.4

684

30.2

5.8

Source: 5paisa Research

Larsen & Toubro (L&T)

L&T is India’s largest engineering and construction company with no real peers when compared to its breadth and depth of offerings. The company’s business mix spans a large spectrum—from complex engineering, procurement and construction (EPC) contracts in the hydrocarbon, process, metals and cement sectors to development of infrastructure projects in sectors like ports, roads, metro rail and airports. Infrastructure formed 65%, Hydrocarbon 15%, Heavy engineering 7%, Power electrical & Auto 7% and Others 6% as of Q2FY18. L&T is well placed to benefit from the uptick in the investment cycle. Capital expenditure is expected to pick-up in India led by resolution of bad debt, pick-up in capacity utilization and recovery in demand. L&T’s order book as of 2QFY18 stood at Rs2,575bn. The order inflow is likely to increase from H2FY18 led by recovery in economy.  We estimate revenue CAGR of 12% over FY17-20E. We believe that L&T’s focus on improving profitability will lead to PAT CAGR of 15% over FY17-20E.  We project an upside of 15% from CMP of Rs1,354 over a period of 1 year.

Year

Net Sales (Rs Cr)

OPM (%)

Net Profit (Rs Cr)

EPS (Rs)

PE (x)

FY17

109,311

10.1

6,041

43.2

31.4

FY18E

121,729

11.0

7364

52.6

25.7

FY19E

135,891

10.8

7825

55.9

24.2

FY20E

152,477

11.1

9260

66.2

20.5

Source:5paisa Research

Apollo Hospital

Apollo is one of the leading private sector healthcare services provider. Apollo has two businesses i.e. hospitals and pharmacies. As of September 30, 2017, it had 70 hospitals with total bed capacity of 9,957 and 2,742 pharmacies. In Q2FY18, hospital business contributed 55% of its business, while pharmacies contributed 45%. The outlook on Apollo’s business is positive owing to its favorable demographics, rising insurance penetration, strong brand and pan-India presence. We estimate CAGR of 13% and 28% in revenue and PAT over FY17-20E. Company has improved ARPOB/day (average revenue per operating bed) from Rs21,724 in FY13 to Rs32,474 in H1FY18. The pharmacy business too has seen improvement in EBITDA margins from 2.7% in FY13 to 4.3% in H1FY18. Company is expected to reap benefits of the capacity expansion that it completed over FY14-16. Company has expanded its capacity by 30% (addition of ~2,500 beds) over FY14-17. Its 11 new hospitals are yet to breakeven, while existing hospitals have a ROCE of 19.3% and they continue to show higher efficiency. The faster breakeven at the Navi Mumbai hospital is positive for the company. We expect ~190bps EBITDA margin expansion during the forecast period. We forecast an upside of 17% from CMP of Rs1125 over a period of 1 year.

Year

Net Sales (Rs Cr)

OPM (%)

Net Profit (Rs Cr)

EPS (Rs)

PE (x)

FY17

7,254

10.0

221

15.9

70.8

FY18E

8,241

10.11

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Impact of Union Budget 2018-19 on markets and Stocks

Impact of Union Budget 2018-19 on markets and Stocks
by Nikita Bhoota 02/09/2018

Finance Minister, Arun Jaitley tabled Union Budget 2018-19 today. Following are the key announcements made at macro as well as sectoral levels.

Macro Key Highlights

  • Government has crossed the divestment target of Rs72,500cr set last year and is expected to reach Rs1lakh crore in FY2017-18. The divestment target set for Union Budget 2018-19 is Rs80,000cr. However, the target set for divestment is below market expectations of Rs1-1.1 lakh crore.

  • FM has revised fiscal deficit target for FY2018-19 to 3.3% of the GDP against the earlier target of 3% after government missed the fiscal deficit target for FY2017-18. Prior budget estimate of fiscal deficit was 3.2% of GDP, the revised estimate at present is 3.5% of the GDP for FY2017-18.

  • Corporate Tax rate reduced from 30% to 25% for companies with turnover less than Rs2.5bn in FY2016-17. It is positive for companies like IEX and CDSL.

Sector Based Announcements and its impact

  1. MSP for all unannounced kharif crops will be 1.5x of their production cost, similar to majority of rabi crops, resulting in improved rural farm income. This will be in favor of agri input stocks like UPL, Rallis etc.

  2. Government proposes to set two new funds – a) Fisheries and Aquaculture Infrastructure Development Fund (FAIDF) for fisheries and b) Animal Husbandry Infrastructure Development Fund (AHIDF) for financing infrastructure requirements of animal husbandry sector.  Government has allocated Rs10,000cr towards these new funds. This will benefit companies like Avanti Feeds, Godrej Agrovet, Apex Foods.

  3. Under the Aayushman Bharat program, a total of 1.5 lakh centers will be set up to provide health facilities close to home. Rs1,200cr has been committed in this budget for this program. FM also announced National Health Protection Scheme to cover 10 crore poor and vulnerable families. Under this scheme, Rs5lakh will be provided for medical reimbursement per family per year. This will be largest government-funded healthcare scheme in the world. Further, allocation towards Pradhan Mantri Fasal Bima Yojana has been increased to Rs13,000cr vs Rs9,000cr last year. These steps will be advantageous for insurance companies like New India Assurance, ICICI Lombard etc. Additionally, it will be positive for hospital sector (stocks) such as Shalby Ltd, Apollo Hospitals.

  4. Customs duty on truck and bus radial tyres raised from 10% to 15%. The move aims at protecting and encouraging domestic manufacturing. This will be beneficial for Indian tyre companies.

  5. Bank Recapitalization has been launched with bonds of Rs80,000cr being issued this year. This recapitalization will pave way for the public sector banks to lend additional credit of Rs5lakh crore. This will benefit public sector banks. Further, to provide impetus to banks, government has increased the allowable provision for NPA from 7.5% to 8.5%. This will reduce tax liability of banks. This is a positive for both public as well as private sector banks.

  6. Under Prime Minister Awas Scheme, more than 1 crore houses will be constructed exclusively in rural areas. In urban areas, the assistance has been sanctioned to construct 37 lakh houses. This will be favorable for stock like HUDCO.

  7. Infrastructure spending has been increased from Rs4.9lakh crore (revised estimates) in FY2017-18 to Rs5.97lakh crore in FY2018-19. The government has also announced plans to spend Rs2.04lakh crore under "Smart City Mission". This spending will be positive for stocks like Larsen & Toubro, Dilip Buildcon, Sadbhav Engineering, Godrej Properties and NCC.

  8. Gold Monetization Scheme will be revamped to enable people to open a hassle free gold deposit account. It looks attractive for stocks like Muthoot Finance and Manappuram Finance.

  9. Import duty on footwear has been raised to 20% from 10%. It looks positive for stocks like Bata and Relaxo.

  10. Government proposes to increase airport capacity by more than 5 times to handle a billion trips per year.  Further, regional connectivity scheme ‘UDAN’ (Ude Desh ka Aam Nagrik) will connect 56 unserved airports and 31 unserved helipads across the country. This proposal is beneficial for aviation stocks like SpiceJet and InterGlobe Aviation. There are 124 airports under Airport Authority of India whose capacities will be expanded. This looks positive for stocks like GMR infra and GVK Power.

Budget takeaways for Individuals

  • Women contribution to EPF reduced to 8% for first 3 years of employment against existing rate of 12% or 10% with no change in employer’s contribution. This will promote women participation in the labor force and will increase their take home payment.

  • Standard deduction of Rs40,000 in place of present exemption for transport allowance and reimbursement of miscellaneous medical expenses. It will benefit 2.5 crore salaried employees and pensioners.

  • Secondary and Higher Education Cess of 3% will be replaced by a Health and Education Cess of 4%.

  • FD and post office interest rate will be exempted till Rs50,000 from existing Rs10,000 for senior citizens. This will give a big relief to most of the senior citizens, as they derive most of their income from bank FDs and post office schemes. Additionally, the limit of deduction for health insurance premium is being increased from Rs30,000 to Rs50,000 for senior citizens.

  • Custom duty on mobile phones raised to 20% vs 15%. Thus, mobile phones are likely to be more expensive.

  • The government has imposed tax on Long Term Capital Gains (LTCG) on sale of securities on gains exceeding Rs1lakh at the rate of 10%, without indexation benefit. However, all gains up to January 31, 2018 will be grandfathered. Previously, income from capital gains held for more than 1 year were tax free. Going forward investors will have to pay LTCG of 10% on income from capital gains above Rs1lakh, thus impacting the returns of investors. This is a negative for stocks market investors and will increase the cost of equity.

  • Government has proposed to implement Dividend Distribution Tax (DDT) of 10% on Equity Mutual Funds. Earlier, dividend received from equity mutual funds were tax free. Thus, the implementation of DDT will reduce the dividend income and in-hand return of the investors.

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Invest in these stocks before Union Budget 2018-19

Invest in these stocks before Union Budget 2018-19
by Nikita Bhoota and Gautam Upadhyaya 01/12/2018

Union Budget 2018-19 is the most widely discussed topic these days. Everyone has high expectations from this budget particularly, as it is the first budget post GST era and the last full budget of the NDA Government for its term from 2014-19. It is expected that this budget will continue to focus on infrastructure development, job creation to stimulate the economy and improving rural income. The major topics likely to be discussed in the upcoming budget are, change in long-term capital gain tax norms and increase in the tax exemption limit from Rs2.5 lakh to Rs.3 lakh p.a.  It may also introduce new policies and reforms to uplift the rural economy, thus resulting in improving the rural consumption.

Union Budget 2018-19 is expected to be the next big trigger for the Stock market. Almost all the stocks are likely to benefit from the announcements to be made in the forthcoming budget. Based on the fundamentals, management outlook, growth prospects and technical charts we have cherry picked the below mentioned stocks for investing before the Union Budget 2019.

DB Corp

Fundamental View

DB Corp is the largest print media company with an added presence in radio and digital media. Its revenue consisted of printing & publishing (91%), Radio (6%) and Others (3%) in FY17. The company enjoys leadership position in radio listenership in cities of Rajasthan, MP and Chhattisgarh.  We expect revenue CAGR of 7.5% over FY17-19E on account of traction in local print media and increase in circulation revenue backed by increasing copies in existing markets and launch of new edition in Surat in Q1FY18E. Additionally, company's foray into radio business is seeing good traction.  Its acquisition of 13 stations to further augment the radio revenue albeit on a small base. Due to better realizations, we expect EBITDA CAGR of 8.3% over FY17-19E. Consequently, PAT would register CAGR of 11.6% over FY17-19E.

Year Net Sales (Rs Cr) OPM (%) Net Profit (Rs Cr) EPS (Rs) PE (x) BVPS (Rs) P/BV (x)
FY17 2,258 28.4 374 20.4 18.6 87.0 4.4
FY18E 2,425 28.3 403 22.0 17.3 104.3 3.6
FY19E 2,608 28.8 466 25.5 14.9 124.9 3.0

Source: 5 Paisa Research

Technical View

Stock DB CORP
Recommendation

The stock has managed to give a breakout above the declining trend line on the daily chart backed by a surge in volumes. The stock has also managed to give a close above its 200 day EMA. We expect the positive momentum to continue in the stock. 

Buy/Sell Range Target Stop Loss
Buy (cash) 372-376 414 348
NSE Code Market Cap(Rs in Cr) 52-week High / low 200 M.A
DBCORP 6,899 395/338 367

Texmaco Rail

Fundamental View

Texmaco’s acquisitions, Kalindee Rail Nirman (track work and signaling) and Bright Power Projects (railway electrification) have positioned it as a ‘Total Rail Solutions’ company. The company now operates in three segments - Heavy Engineering (wagons/freight cars), Steel Foundry and Rail EPC, contributing ~ 49%, 15.9% and 35.4% respectively to FY17 sales. We expect finalization of tender for 9,500 wagons by Indian Railway may help strengthen its wagon division order book. The RAIL EPC division’s sales and profitability is improving on back of completion of legacy contracts. Further, speedy electrification and completion of Dedicated Freight Corridor (DFC) projects will be positive for the company. The company’s foray into international markets - South East Asia, West Asia, Middle East Asia and Africa are likely to aid future growth in all the segments. Thus, we project revenue CAGR of 20% over FY17-19E. The present order book is ~Rs3,800cr (2.8xFY17 sales) providing strong sales visibility. We expect incremental sales to result in EBITDA margin expansion by 490bps by FY19E. PAT is expected to grow (led by improving operating performance and decline in interest) at 83% over the same period.

Year Net Sales (Rs Cr) OPM (%) Net Profit (Rs Cr) EPS (Rs) P/BV (x)
FY17 1,154 5.0 34 1.6 2.5
FY18E 1,000 4.0 2 0.1 2.5
FY19E 1,650 9.9 114 5.2 2.3

Source: 5 Paisa Research

Technical View

Stock Texmaco Rail & Engineering Limited
Recommendation

The stock is in a higher top higher bottom chart structure on the daily chart and has managed to take support along the rising trend line. The trend and strength analysis indicates that the current momentum is likely to continue further.

Buy/Sell Range Target Stop Loss
Buy(cash) 117-119 136 108
NSE Code Market Cap (Rs in Cr) 52-week High / low 200 Day M.A
TEXRAIL 2,609 128/84 103

Ingersoll- Rand Ltd

Fundamental View

Ingersoll Rand (IRIL) manufactures and sells air compressors, which include reciprocating compressors, centrifugal compressors and system components. IRIL enjoys strong market positioning in domestic compressors market. We believe that pick up in user industries (automotive, metals, pharmaceuticals and textile) along with introduction of new products and development of Naroda as an export base for large reciprocating compressor packages and parts is likely to drive future sales. Thus, we see revenue CAGR of 12.5% over FY17-19E. Indigenization of most of its products and high realization from new products is likely to help the company maintain EBITDA margin despite pricing pressure. Hence, we project PAT CAGR of 12.5% over FY17-19E. The company’s debt free status and unencumbered promoter holding of 74% adds further stability. 

Year Net Sales (Rs Cr) OPM (%) Net Profit (Rs Cr) EPS (Rs) PE (x) P/BV (x)
FY17 664 19.0% 77 24.4 35.7 2.6
FY18E 730 18.9% 85 26.9 32.4 2.4
FY19E 840 19.0% 97 30.9 28.2 2.2

Source: 5 Paisa Research

Technical View

Stock INGERSOLL RAND LTD
Recommendation

The stock is on the verge of witnessing a symmetrical triangle breakout on the monthly chart and has also witnessed a smart uptick in volumes. The positive strength shown by the stock on the weekly MACD Histogram affirms our bullish view on the stock. 

Buy/Sell Range Target Stop Loss
Buy(cash) 858-868 998 784
NSE Code Market Cap(Rs in Cr) 52-week High / low 200 Day M.A
INGERRAND 2,841 940/645 795

Cera Sanitaryware

Cera Sanitaryware is a pioneer in the sanitaryware segment in India. It is the third largest player in the organised sanitaryware business with market share of ~23%. It generates revenue from sanitaryware (~62%), faucets (~21%) and tiles (~17%) business. We see revenue CAGR of 23% over FY17-19E as company’s tie-up with Italian luxury brand ISEVA will help company to tap premium sanitaryware market. New innovative launches in faucet segment as well as commissioning of tiles plant in south, where presence of organised players is limited will also boost the revenues. Further, the replacement demand in India forms only 10-15% of total demand, whereas worldwide it contributes around 75-80%. Hence, with rising standard of living, the replacement demand for sanitary ware and faucet is expected to witness northward movement. Consequently, we expect ~23% CAGR in revenue over FY17-19E. The entry into premium segment, GST implementation and improving operating performance would drive PAT at ~27% CAGR over FY17-19E.

Year Net Sales (Rs Cr) OPM (%) Net Profit (Rs Cr) EPS (Rs) PE (x) P/BV (x)
FY17 1,006 17.0% 99 76.2 49.6 9.4
FY18E 1,172 17.00% 120 92.3 40.9 7.9
FY19E 1,383 17.0% 144 110.8 34.1 6.6

Source: 5 Paisa Research

Technical View

Stock Cera Sanitaryware Limited
Recommendation The stock is in a higher top higher bottom chart structure on the monthly and weekly chart. The stock has also formed an ascending triangle formation on the daily chart; we expect the stock to breach its upper resistance trend line and head higher.
Buy/Sell Range Target Stop Loss
Buy(cash) 3,770-3,790 4,210 3,490
NSE Code Market Cap(Rs in Cr) 52-week High /low 200 M.A
CERA 4,912 4,300/2,023 3,150

Reliance Industries Ltd

Fundamental View

Reliance Industries (RIL) is one of the largest private sector enterprises in India. RIL is a vertically integrated company with business interests in energy and materials value chain. Its revenue in FY17 comprised of refining business (64%), petrochemical business (24%) and others (12%). The company has rapidly grown its broadband business (4G) through RJio owing to strong operating competitiveness and healthy consumer traction. We estimate revenue CAGR of 18.2% over FY17-19E on account of expansion of RJio and strong refining margin outlook.  Jio’s RMS (revenue market share) is expected to be ~30% over next few years. Company’s margins are expected to remain robust due to firm demand and improving utilization in polyester segment. Refinery off-gas cracker (ROGC) has been commissioned and will be ramped up to full utilization by FY18E. In addition, company has commissioned 4 of its 10 petcoke gasifiers, which will ramp up over FY18-19E. Our outlook on refining remains strong with growth in petro-product demand outpacing supply additions. This should keep RIL’s GRM (Gross Refining Margin) in the US$11-11.5/bbl range. Consequently, we expect PAT CAGR of 12.2% over FY17-19E.

Year Net Sales (Rs Cr) OPM (%) Net Profit (Rs Cr) EPS (Rs) PE (x) P/BV (x)
FY17 305,400 15.1% 29,800 50.3 18.6 2.1
FY18E 392,700 15.0% 34100 57.6 16.3 1.9
FY19E 427,100 17.4% 37,600 63.5 14.8 1.7

Source: 5 Paisa Research

Technical View

Stock Reliance Industries Limited
Recommendation The stock is currently trading in a rising channel formation on the weekly chart. It has also witnessed a bullish crossover on the daily MACD Indicator. We expect the stock to trend higher and to move towards the upper end of the channel.
Buy/Sell Range Target Stop Loss
SELL-Jan Futures 935-940 1,010 888
NSE Code Market Cap(Rs in Cr) 52-week High /low 200 M.A
RELIANCE 594,779 957/508 801

Research Disclaimer

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5 Stocks for next week 15th Jan-19th Jan 2018

5 Stocks for next week 15th Jan-19th Jan 2018
by Gautam Upadhyaya 01/12/2018

BHARTI INFRATEL - BUY

Stock BHARTI INFRATEL
Recommendation The stock has formed a bullish engulfing candlestick pattern on the daily chart and has managed to give a close above its short term EMA. The stock has also formed a bullish hammer formation on the weekly chart.
Buy/Sell Range Target Stop Loss
Buy(cash 373.5-375.5 389 364
NSE Code Market Cap(Rs in Cr) 52-week High /low 200 Day M.A
 INFRATEL  69036 481/283 382

KARNATAKA BANK - BUY

Stock KARNATAKA BANK
Recommendation The stock has managed to give a close above the declining trend line on the daily chart backed by a surge in volumes. Derivative data is also suggesting a fresh long build up which is indicated by surge in price and O.I.
Buy/Sell Range Target Stop Loss
Buy(cash) 165.5-167.5 177 159
NSE Code Market Cap(Rs in Cr) 52-week High / low 200 Day M.A
KTKBANK 4721 181/112 150

 

TATA GLOBAL BEVERAGES - Buy

Stock TATA GLOBAL BEVERAGES
Recommendation The stock has given a breakout from its sideways consolidation on the daily chart backed by a surge in volumes; The stock is also on the verge of witnessing a bullish crossover on the daily MACD indicator.
Buy/Sell Range Target Stop Loss
Buy(cash) 323-326 337 315
NSE Code Market Cap(Rs in Cr) 52-week High / low 200 M.A
TATAGLOBAL  20489 327/126 216

DISH TV - SELL

Stock DISH TV
Recommendation The stock has formed a large bearish candle on the daily chart which has been accompanied by a rise in volumes. The stock has also breached its support levels and has given a close below its 200 day EMA which affirms our negative view on the stock.
Buy/Sell Range Target Stop Loss
Sell Jan Futures 78-79 73 82
NSE Code Market Cap(Rs in Cr) 52-week High / low 200 M.A
DISHTV 8362 110/68 82

REPCO HOME FINANCE - SELL

Stock REPCO HOME FINANCE
Recommendation The stock has formed a bearish candlestick on the weekly chart. It has also shown weakness on the daily MACD Histogram. Derivative data suggests fresh short positions.
Buy/Sell Range Target Stop Loss
SELL-Jan Futures 680-684 654 702
NSE Code Market Cap(Rs in Cr) 52-week High / low 200 M.A
REPCOHOME 4233 932/552 675

Research Disclaimer

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Do’s and Don’ts of Stock Market Investing for Beginners

Do's and Don'ts for beginners

With a trading account and demat account you are ready to trade. But if you are a beginner in the stock markets, then that is not all. You also need to keep a tab on some major do’s and don’ts before you venture into investing in the stock markets. Let us look at 10 such key dos and don’ts for investors.

10 important do’s and don’ts for investment beginners

Do’s are about doing the right things in the market when you are starting off on your investing journey while the don’ts are the ones to avoid. Here are ten such important dos and don’ts for investing beginners.

  1. Do your research before investing? Remember, research of a stock is not a rocket science and it is all about getting your research process right. Get comfortable reading the balance sheets and income statements of a company. Also read the Management Discussion and Analysis (MDA) of the stock you are planning to invest in.

  2. Start with your goals in mind. You must be clear about how much risk you are willing to take and how much risk you can afford to take. Your equity portfolio should be within the limits defined by your allocation. Always start with a plan.

  3. Don’t put all your eggs in one basket. That is age old wisdom and applies to investing as well. In technical parlance it is called diversification where you effectively spread your equity investments across sectors and themes so that your investment performance is not dependent on any one stock or sector.

  4. Take a long term view and cultivate that habit in the very beginning. It is futile to time the market. Not only that it is hard to consistently get the tops and bottoms of the market right but it hardly makes any difference to your eventual returns.

  5. Try to invest consistently and regularly instead of putting a large corpus in a stock of your choice. The advantage of being regular is that it instils discipline in your investment and also gives the added benefit of rupee cost averaging. That means; over time your average cost of investing comes down.

  6. Even through equity is about the long term, try to get bargains. Even if you are convinced about the long term prospects of Infosys, it makes a lot of business sense to buy at Rs.650 than at Rs.750. Quite often, a market correction creates salivating bargains. Use such corrections to add quality stocks at low prices.

  7. Divide your equity portfolio between core holdings and satellite holdings. Your core holdings are your long term investment portfolio and you don’t sell these stocks at every correction. On the other hand, the satellite portfolios are more of a trading portfolio where you look out for short to medium term opportunities in the market. Have a separate approach to both these types of stocks.

  8. Don’t ignore trading costs. Even if you are a long term investor, take at a close look at your costs. Your cost is not just about brokerage costs but there are a number of other costs too. There are statutory costs, exchange charges, demat AMC, DIS charges, demat and remat charges etc. All these need to be added to calculate your effective cost. Nowadays, it makes a lot of sense to opt for low-cost discount brokers who can give the same execution at a much lower cost.

  9. As a beginner, remember that quality always wins in the end. When we talk about quality we are talking about quality at a number of levels. Look at quality of earnings; more of the earnings must be coming from the core business. Look at profitability; the company must be earning more margins than the peer group. Take stock of asset turnover; it tells you how efficiently the business is using assets. At a qualitative level, prefer companies that have high standard of disclosure and transparency. Large caps or mid caps, this quality approach always works in your favour.

  10. Make effective use of technology and if you are a beginner then you better get used to it early. Ideally use the online trading platform; it gives you a lot more control over your trades. Also, if possible you can download the app on your smart phone which allows you to trade on the run. Get used to reading electronic contract notes and ledgers; they are a lot more convenient and environment friendly than printed stuff.

In an effort to chase stocks, investors tend to forget that investment success is a lot more about discipline than about skills or flair. It is in your hands to make your investments work in a systematic manner.

Next Article

Everything you need to know about Burger King IPO

Everything you need to know about Burger King IPO
by Mrinmai Shinde 12/01/2020
Quick service restaurant chain, Burger King India is launching its three-days long IPO from 2nd December to 4th December. The company has set the price band at ?59-?60 per share for its IPO.

Through the IPO the company aims at raising ?810 crore. Of the total amount the promoter entity QSR Asia Pte Ltd will sell up to 60 million shares, which would amount to ?360 crore while a fresh issue of shares will aggregate to ?450 crore. The company has also raised a pre-IPO funding of ?92 crore from public markets investor Amansa Investments Ltd at ?58.5 per share.

Burger King IPO details at a glance

IPO Date

Dec 2, 2020 - Dec 4, 2020

Finalisation of Basis of Allotment

Dec 9, 2020

Initiation of refunds

Dec 10, 2020

Transfer of shares to demat accounts

Dec 11, 2020

Listing Date

Dec 14, 2020

Issue Size

?810.00 Cr

Fresh Issue

?450.00 Cr

Offer for Sale

?360.00 Cr

Face Value

?10 per equity share

IPO Price

?59 to ?60 per equity share

Min Order Quantity (each lot)

250 Equity Shares

Min Amount Cut off

?15,000

Maximum Lots allowed

3250 Shares (13 lots)


Want to know our suggestion? Read here - Burger King IPO Note.

Things you need to know:

Burger King India Limited is one of the fastest growing international QSR chains in India during the first five years of operations based on the number of restaurants. Talking about the global presence, when measured by the number of restaurants, with a network of 18,675 restaurants in over 100 countries, Burger King is the second-largest fast food burger brand globally. In India, the company owns 261 restaurants which include eight Sub-Franchised Burger King Restaurants, across 17 states and union territories and 57 cities across India.

Burger King India has exclusive franchise rights in India and a strong customer value preposition. Apart from the customer loyalty and brand value, strong management and a vertically scalable supply chain are the company’s key strengths. The company will use the funds raised through the IPO to finance the roll-out of new company-owned Burger King Restaurants, repayment or prepayment of outstanding borrowings and to meet the general corporate purposes.

If you are looking for the short-term gains through the IPO, you need to bear in mind that if there is a spike in the Covid cases and there is another round of lockdown, then the business might take a hit. The termination of the Master Franchise and Development Agreement could also pose a threat to the business. Lack of identification of the locations when expanding in new regions, and deteriorating relations with third party delivery aggregators apart from perceived and real health concerns along with shifting food preferences and habits are a few things to look for. Having said that, the investment would turn out to be promising in long term.

This year has seen a lot of good IPOs, which has encouraged a lot of new investors to enter the markets. Apart from Burger King, the other companies that issued IPOs this year include SBI Card, Rossari Biotech, Mindspace Business Parks REIT, Route Mobile, Happiest Minds Technologies, Angel Broking, Chemcon Speciality Chemicals, Computer Age Management Services, Mazagon Dock Shipbuilders, UTI AMC, Likhitha Infrastructure, Equitas Small Finance Bank and Gland Pharma.

How to apply for Burger King IPO?
  • In 5paisa Trading App, go to IPO Section reflected on the home screen
  • Click on Apply IPO
  • Enter Quantity and Price to bid for
  • Enter UPI id to block funds on
  • Later in the day you will receive funds block confirmation in your UPI app, which needs to be approved

If you are not a 5pasia customer, you can apply for the IPO using any supported UPI apps. Click here to find the list of UPI apps and banks supporting the IPO application.

Watch the video below to know more about the Burger King IPO