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Titan Company 2369.25 (-0.72%)
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Adani Enterprises: A multibagger with a high growth potential

Adani Enterprises: A multibagger with a high growth potential
by 5paisa Research Team 12/11/2021

Adani Enterprises Limited has a diversified business portfolio spanning coal trading, coal mining, oil and gas exploration, ports, multi-modal logistics, power generation, and transmission and gas distribution. It is a largecap company with a market capitalization of Rs 1,85,961 crore. It has a PE of 183 while the sector PE lies at 227.79 indicating that the company is not overvalued. Despite being its sector leader, the company has tremendous growth potential and has aggressive futuristic plans.

Adani Enterprises have a higher than industry revenue growth. In the last 5 years, revenue has grown at 2.77 per cent YoY, vs the industry average of 1.12 per cent. and consistently increasing market share over the last five years from 48.11 per cent to 52.22 per cent make it investment-worthy. Almost 75 per cent of the stake is held by promoters which shows that they believe in this company. The foreign investors hold about an 18 per cent stake, while the remaining is held by the domestic institutions and mutual fund houses.

From a technical perspective, Adani Enterprises has been scaling newer highs since the 2020 crash. It has given a whopping 355.45 per cent in one year and 8.5 per cent in a one-month period when the indices were bleeding. Adani Enterprises has been trading strongly for the past nine trading sessions with above average volumes. The stock has a beta value of 1.42. The stock, being highly volatile in nature, is trading in a broader range of 1350-1700 for a few months. The RSI is going strong at 66 showing bullishness and the positive movement indicator +DMI is positioned much higher than its -DMI indicating that the trend is gaining momentum. It is currently testing its all-time high levels of 1700 and any closing above it will mean that the uptrend is likely to continue. The stock is certainly attractive, traders and investors should closely watch this stock.

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ZEEL announces its quarterly results, stock trades flat amidst good results

ZEEL announces its quarterly results, stock trades flat amidst good results
by 5paisa Research Team 12/11/2021

The due diligence is in progress on the proposed merger with Sony Pictures.

The media and entertainment giant Zee Entertainment Enterprises Ltd, popularly called ZEEL, often entertains shareholders and enjoys the buzz. In just the last three months, the stock has appreciated by over 61% on the back of the merger with Sony Pictures Networks India. The company came out with its quarter ended September results on 11 November 2021, after the market hours.

The reported Q2FY22 financials were pretty strong. The consolidated net sales stood at Rs 1,979 crore which witnessed a decent 11.5% growth on a sequential basis, and nearly 15% growth on a YoY basis. It reported EBITDA of Rs 403 crore which too soared by about 21% on a QoQ basis and nearly 37.6% when compared to Q2FY21. The net profit number jumped by 27.4% on a sequential basis to reach the Rs 266 crore mark, which also witnessed steep growth of 185% on a YoY basis.

ZEEL has been the trending company on Dalal Street since it announced its merger with Sony Pictures in September. The stock went from Rs 186 to Rs 310+ on the announcement of the merger between ZEEL and Sony Pictures. However, this merger has led to a heated fight between Invesco and ZEEL. Invesco was looking forward to a strategic merger with Reliance Industries (which owns Network 18), but instead, ZEEL merged with Sony Pictures. Invesco, which is the largest shareholder of ZEEL (17.5%) has filed a request for EGM and demands the removal of current MD and CEO, Punit Goenka, the hearing of which will be announced soon by the Bombay High Court.

Zee Entertainment Enterprises Ltd is a global media and entertainment conglomerate present in television broadcasting, movies, music, live entertainment, etc. It has evolved from being an Indian Television broadcaster to a global content company. It offers 46 domestic channels and provides over 2.4 lakh hours of content. It has the highest market share of 18.4% in India in the broadcasting business.

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Top 5 gainers and losers in the Midcap and Smallcap segment during this week!

Top 5 gainers and losers in the Midcap and Smallcap segment during this week!
by 5paisa Research Team 12/11/2021

List of top 5 gainers and losers in the Midcap and Smallcap segment for the week from 5 to 11 November 2021.

US Inflation jumped to a 30 year high of 6.2% in October which was higher than the consensus of 5.9%. The inflation fueled the fear factor looming around a rate hike in the US, which would make the emerging markets lose their sheen and trigger a sell-off. Indian equity markets witnessed bearish sentiments amid the US Inflation jump whereas Bond markets were unaffected on the back of RBI’s assurance of inflations numbers in place and continued accommodative stance.

No significant movement was found in S&P BSE Midcap Index which closed the last trading session with a marginal gain of 0.87% at 26219.07 for the 4 trading sessions for the week. Meanwhile, it logged a loss of 3.91% from its 52-week high of 27246.34 on 19 October. The premium of BSE Midcap and Smallcap saw a decline on account of overheated valuations. The S&P BSE Smallcap closed at 29159.39 for the week with a marginal gain of 0.89% and a loss of 4.31% from its 52-week high of 30416.82 on 19 October.

Let us have a look at the top 5 gainers and losers in the Midcap space for this week:

 

National Standard (India) Ltd. 

21.55 

Brightcom Group Ltd. 

21.49 

KPIT Technologies Ltd. 

15.82 

VIP Industries Ltd. 

 

13.61 

 

RattanIndia Enterprises Ltd. 

13.5 

The bull rally was led by National Standard (India) Ltd in the mid-cap segment. The shares of the company delivered a weekly return of 21.55%. The share price of the company rose from Rs 12671.95 to Rs 15402.7 during the period. The multibagger stock has been buzzing for some time logging gains of 178.58% in just one month while a mindboggling return of 2268% in 6 months and 2224.23% in the last one year.

National Standard (India) Ltd operates as a subsidiary of Anantnath Constructions and Farms Private Limited. The company is engaged in the manufacture of bead wire for tyres and other types of specialized wires. The company is a major exporter of tyre bead-wire and tyre moulds. They have specially developed hi-tensile tyre bead-wire with high tin content in the bronze plate, for the overseas markets. The company has also diversified into the development and construction of residential real estate projects in Mumbai, India.

The top 5 losers from the Midcap segment for this week are as follows:

Firstsource Solutions Ltd. 

 

-10.64 

 

Bharat Heavy Electricals Ltd. 

 

-9.62 

 

Balaji Amines Ltd. 

 

-9.35 

 

KRBL Ltd. 

 

-7.89 

 

Laurus Labs Ltd. 

 

-7.25 

 

The laggards of the midcap segment were led by Firstsource Solutions Ltd. The shares of the company declined 10.64% from Rs 200.60 to Rs 179.25. The company is engaged in the business of providing customer management services like contact centre, transaction processing and debt collection services including revenue cycle management in the healthcare industry. The company declared its second-quarter results on 10 November. Sales rose 20.36% and Net profit rose 28.23% to Rs 135.01 crores on YoY basis for the company. The share of the company fell sharply by 9.4% after the results were declared.

Let us move towards the top 5 gainers and losers in the Smallcap segment:

 

The top 5 gainers in the Smallcap segment for this week are as follows: 

3I Infotech Ltd. 

39.53 

Subex Ltd. 

25.47 

Monte Carlo Fashions Ltd. 

24.54 

EKI Energy Services Ltd. 

21.55 

Raghuvir Synthetics Ltd. 

21.51 

The top gainer in the Smallcap segment 3I Infotech Ltd. The buzzing stock surged nearly 39.53% for the week. Share price of the company rose from Rs 48.7 to Rs 67.95 during the period. The stock has given multibagger returns, it has rallied of 366% in the month of October and has given share price returns of 2142% in last one year.

3I Infotech is a global Information Technology company which provides technology solutions to over 1500 customers in more than 50 countries across 5 continents, spanning a range of verticals.  

The top 5 losers in the Smallcap segment for this week are as follows:

NGL Fine-Chem Ltd. 

-16.04 

Fairchem Organics Ltd. 

-13.24 

Godawari Power And Ispat Ltd. 

-11.94 

GTL Infrastructure Ltd. 

-11.76 

Goldiam International Ltd. 

-11.51 

The losers of smallcap space were led by NGL Fine-Chem Ltd. The shares of NGL Fine- Chem fell from Rs 3275.60 to Rs 2750.25 registering a loss of 16.04% in the stock price. NGL Fine-Chem is a manufacturer of pharmaceuticals and intermediates for usage in veterinary and human health. Last week the stock has registered gains of 21.6% which saw a reversal this week. The second quarter results declared by the company saw an increase in revenue of 15.09% but Net Profit decreased by 4.10% on a YoY basis. 

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Bhavook Tripathi: Analyzing the stock-picking strategy and philosophy of this market expert

Bhavook Tripathi: Analyzing the stock-picking strategy and philosophy of this market expert
by 5paisa Research Team 12/11/2021

Bhavook is known to have a concentrated portfolio and when he buys, he buys big!

Pune based-Bhavook Tripathi shot into super-stardom when he launched an open offer to acquire 26% of the share capital of R Systems International, a company engaged in providing software product development and BPO services. Tripathi invested Rs 40.81 crore in the open offer in 2011 and still holds the shares to this day. According to the latest corporate shareholdings filed as of September 2021, Tripathi holds 42,539,454 shares of R Systems International (35.6% of its capital) worth Rs 1,012.9 crore.

Looking at his massive stake in the R Systems, it should come as no surprise when we say that Bhavook believes in a concentrated portfolio. When he buys, he buys big. Unlike other investors who invest a bit here and a bit there, hoping that something somewhere will click, Bhavook instead waits patiently for that once-in-a-lifetime opportunity to show up, and when it does, he acts with conviction and pledges a sizeable chunk of his wealth on that bet.

Bhavook Tripathi made his first fortune with FAG Precision Bearing, a company engaged in the business of high-precision ball bearings to leading automobile companies. What he noticed was this blue-chip MNC had a low market capitalization of just Rs 35 crore. This was in 1999 when most of the market was obsessed with high-growth IT companies such as Wipro and Infosys. Unlike other investors, Bhavook had the vision to see that stock was unvalued and invested a huge chunk of his resources into the stock. He was proven right because FAG bearings went on to become a multibagger several times over.

The war chest gained by selling his stake in FAG Bearings was put to use while purchasing his second stock pick – a company called Solvay Pharma. This company was in the news because Abbott Labs was buying over the company in a global deal. A few paid attention to this news but Bhavook was among those that realized that sooner or later, Abbott would have to make an open offer to the shareholders of Solvay. A giant conglomerate buying over assets and willing to pay any sum of money to the Indian shareholders seemed like an obvious investment opportunity in hindsight but Bhavook was among the few that spotted it. There were some fluctuations in the stock price with a lot of uncertainty surrounding the company, but four years later, Bhavook netted a gigantic profit by selling the shares he purchased at Rs 488 to Rs 3,054.

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Astral is gaining momentum after excellent Q2 numbers

Astral is gaining momentum after excellent Q2 numbers
by 5paisa Research Team 12/11/2021

This leading pipe manufacturing company rallied 250% in the last 18 months with strong fundamentals

Astral had a dream run in covid time, the stock rallied from Rs 730 to Rs 2,270 today, registered return of 250% in last 18 months.

Astral Poly Technik Ltd was established in 1996, which is among the fastest-growing piping companies, manufactures plumbing and drainage systems. It has also forayed into the adhesive business over years.

Business model

Piping Division (77% of revenues) -This is the main business of the company, it manufactures pipes and fittings for plumbing, sewerage, agriculture, industries, fire sprinklers. It also manufactures pipes for conduit & cable protection, ancillary products, urban infra and ducting.

Adhesives Division (23% of revenues) - Its adhesives business sells a wide range of products viz. Epoxy adhesives & putty, silicone sealants, construction chemicals, PVA, cyanoacrylate, solvent cement, tapes and other products.

The piping division mainly caters to the infrastructure industry and, Adhesives mainly cater to the automotive and packaging industry.

Competitive strength

1. Strong brand equity - Astral has continuously invested in brand & promotional activities through Bollywood movies, associate sponsor of Indian Premier League teams among others. It also boarded Ranveer Singh (star) as the brand ambassador of Astral pipes for three years.

2. Wide and deep distribution reach - The company has a base of 800+ distributors and 31,000+ dealers for its piping business and a base of 1,300+ distributors and 130,000+ distributors for its adhesives business.

3. Product innovation & Backward integration – Astral is the first company to introduce CPVC pipes in India in 1999 which has more stability and withstand high temperature than PVC pipes. After a few years to save cost they started manufacturing raw materials for CPVC pipes.

Exceptional Financials

In the last ten years from FY10 to FY21, revenue has grown at a CAGR of 23% and profit has grown at a CAGR of 28% which shows the steep growth of the company. The operating margin is consistent and stable in the range of 12% to 20% for the last 10 years. Very few companies have exceptional financials like this, Astral is one among them.

Yesterday the Q2 numbers were out. The stock was more than 2% up after excellent Q2-FY22 numbers. Net sales grew 54% on a YoY basis stood at Rs 1,154 crore, EBITDA grew by 48% on a YoY basis to Rs 219 crore, Net profit jumped 63% on a YoY basis to Rs 143 crore.

Growth drivers – Government infrastructure spending, increasing construction, government schemes like “Housing for all” by 2022, National rural drinking water program would benefit pipe companies, Astral would be a major beneficiary.

Valuation - Companies with strong fundamentals and strong growth prospects will trade in premium. It is trading at a TTM P/E of 87x against an industry P/E of 25x. It is definitely higher in valuation.

Do you feel fundamentals and company performance would justify buying it?

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Superstar stocks for tomorrow!

Superstar stocks for tomorrow!
by 5paisa Research Team 12/11/2021

Looking for stocks that could deliver good returns till tomorrow, here are the superstar stocks for tomorrow selected on a three-factor model.

Many of the time market participants see a stock opening with a gap-up and wish they should have bought this superstar stock a day before to take advantage of the gap-up move. To fulfil this wish, we have come out with a unique system, which would help us to get the list of candidates that can be probable superstar stocks for tomorrow.

The superstock stocks for tomorrow selected are based on a three-factor prudent model. The first important factor for this model is price, the second key factor is the pattern, and last but not least is the combination of momentum with volume. If a stock passes all these filters it would flash in our system and as a result, it will help traders to spot the superstar stocks for tomorrow at the right time!

Here are the superstar stocks for tomorrow.

IDFC: IDFC soared more than 10% on Friday. The volume witnessed today was 3.5-fold the 10-day daily average volume. The stock traded firmly in green throughout the day and a strong green candle on the hourly timeframe was witnessed towards the end. The RSI is in the bullish territory on the hourly, daily, and weekly time frame. The stock is an ideal candidate for the BTST trade.

Aavas Financiers: The stock of Aavas rose about 4% on the trading session of Friday. The stock is nearing its resistance level of 2950-3000. It gained good momentum today in the early hours of the trade. It has witnessed strong buying today with RSI at 63. The demand from the bulls is evident from the fact the stock has witnessed above average volumes. The stock has the potential to take out 3000 while the immediate support lies at 2800 which is its 20-DMA.

L&T Technology Services: The stock has risen 2.25% on Friday outperforming the benchmark indices. The LTTS stock is trading strongly for 13 trading sessions and has an RSI of 70 indicating its strong strength on the upside. It has witnessed decent volumes and has had the rejection of its lows showing that the bulls are still interested in the game. The stock could see levels of Rs 5400-5500 very soon.

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