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Company manufacturing product with potential market value of $115 million- Sigachi Industries IPO

28/10/2021

Sigachi Industries IPO will open for subscription between 1 Nov to 3 Nov. Shares will be offered at a price band of Rs.161-Rs.163. The minimum investment value is set at Rs.14,670 (90 shares) with a Face value of Rs.10 each. The listing date is set as 15 November. 

About the company:
Sigachi Industries, incorporated in 1989, is a company that manufactures Microcrystalline Cellulose. This component is used as an excipient for finished dosages in the pharma sector. The company manufactures various different grades of this component starting from 15 microns all the way to 250 microns. The company manufactures 59 different grades of MCC at its three manufacturing plants in Gujarat and Hyderabad. The total MCC manufacturing capacity as of 31st March, 2021 stands at 13,128 MTPA from all its locations. 

Financials:
Sigachi has seen a continuous growth across all the parameters. Revenue exhibited a sharp rise of 36.2% YoY growth from Rs.144 crores in FY20 to Rs.198 crores in FY21. Profit after tax also grew by a whopping 49% in FY21. The PAT Margin witnessed a growth of 100bps i.e. a growth of 15% in FY21. 

About the IPO:
The company plans on raising approximately Rs.125 crores through this IPO. Sigachi is offering 76.95 lakh equity shares with a face value of Rs.10 each. The promoters of the company are Rabindra Prasad Sinha, Chidambarnathan Shanmuganathan, Amit Raj Sinha and RPS Projects & Developers. The promoters hold 53.32% stake in the company. The total shareholding of the promoters and the promoter group stands at 64.64%. The book running lead manager to this issue is Unistone Capital. 

Main objectives of the IPO:
    • Funding the capex for expansion of production capacity at the two Gujarat manufacturing facilities
    • General corporate purposes

Why should you invest in this IPO?
The market for Microcrystalline Cellulose is estimated to be valued at $115 million by FY23 and a 4 year CAGR of 6.3% is stated by analysts. This high growth is attributed to the increase in demand of cosmetics, processed foods and personal care products. Along with the uses mentioned above, MCC is also widely used as an anti-caking agent in various food products and also as a hot and cold stabilizer. Keeping this in mind we can also see that the Indian food and pharma market is ever growing and this high growth isn't about to plateau anytime soon.

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ITC Q2 profit, revenue rise but shares extend losses

by 5paisa Research Team 28/10/2021

Cigarette-to-hospitality conglomerate ITC Ltd has reported a 10% increase in its consolidated net profit for the second quarter as sales rose, but its shares continued to fall after touching a one-year high earlier this month.

Profit for the July-September climbed to Rs 3,714 crore from Rs 3,368 crore during the year-ago period. 

Sequentially, the profit after tax grew 13% from Rs 3,276 crore in the three months ended June.

The rise in profit was in line with the increase in revenue from operations, which grew 13% to Rs 14,844 crore from Rs 13,147 crore during the year ago period. 

The numbers were above the estimates projected by several analysts, even though cigarette sales volumes were lower than expected. Jeffries, however, said in a report that lower cigarette volumes were offset by higher margins. 

Shares of ITC, a stock market laggard in recent years, fell 3% in early afternoon trade to Rs 231.25 apiece on the BSE, where the benchmark Sensex was 0.8% lower. The shares have declined 12.5% from a one-year high of Rs 265.30 apiece on October 18, but are still up 41% from a one-year low touched in October last year.

ITC Q2: Other highlights

1) Profit before tax rose to Rs 5,055 crore from Rs 4,565 crore a year earlier.

2) Revenue from the cigarette segment increased to Rs 6,219 crore from Rs 5,627 crore a year ago.

3) The cigarette segment saw a 10% increase in profit before tax to Rs 3,762 crore.

4) Revenue from the FMCG business rose 1% on a year-on-year basis to Rs 10,623 crore.

5) Revenue from the hotels business jumped 253% to Rs 311 crore as the hospitality sector recovered from the impact of Covid-related lockdowns

6) Revenue from other businesses grew just 2.8% over the year-ago period to Rs 4,043 crore.

ITC commentary

The company said it saw a broad-based recovery across sales channels and markets, as the intensity of the pandemic declined and the pace of vaccination picked up in the country. 

Although there was an uptick in demand, the positives were also offset by a steep inflationary impact on input costs as well as supply chain disruptions. 

ITC also reported a significant growth in its revenue from its agribusiness. This was mainly on account of growing exports of commodities like wheat, rice and leaf tobacco, as well as its strong sourcing network and the customer relationships, which it was able to take advantage of. 

The company launched two new hotel brands, ‘Storii by ITC’ and ‘Momentos by ITC’. Two new hotels were also launched in the country under the brand ‘Welcome’.

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Technical Analysis: Astra Micro gives channel breakout

Technical Analysis: Astra Micro gives channel breakout
by 5paisa Research Team 28/10/2021

Astra Micro was consolidating from the past 22 trading sessions and breaks out from a consolidation phase on October 28, 2021. Read on to find out more.

Astra Microwave Products Ltd indulges in the business of designing, developing and manufacturing sub-systems for radiofrequency and microwave systems that are particularly used in defence, space, meteorology and telecommunications.

The company in Q1 FY22 posted a net profit of Rs 9.66 crore compared to a net loss of Rs 83 lakh that was reported in Q1 FY21. However, on a sequential basis, the stock has witnessed a 62% fall in its net profits when compared with Q4 FY21 earnings. Speaking about revenue, the company reported 23% growth in its revenue to Rs 120 crore as against Rs 97 crore in Q1 FY21.

In the last one year, this small-cap stock has soared almost 131%, outperforming the Nifty Small Cap 100 Total Returns Index (TRI) that ascended 87%. Whereas in the last one and a half year, Astra Micro jumped fourfold. Having said that, the stock has broken out from the channel on the daily charts. Even the volumes seem to be elevated signalling the strength of breakout.

Looking at the technical indicators such as Relative Strength Index (RSI), which is presently trading at 66 level which is above its 20-Day Exponential Moving Average (EMA) of 60. However, from the present consolidation phase, it is showing a negative divergence. On the other hand, Moving Average Convergence Divergence (MACD) is showing positive signs as, at the time of breakout, it witnessed a positive crossover in the positive territory.

The immediate support is placed at 214 levels, whereas the 234.35-238.30 zone would be the resistance for the stock. It is advisable to invest in stock on a pullback. In fact, in today’s trade, we do see the stock price moving down. Therefore, entering on pullback o validation makes complete sense.

At the time of writing Astra Microwave Products Ltd was trading at 225.45.

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Multibagger Alert: This midcap IT stock has risen close to 323% in the past year!

Multibagger Alert: This midcap IT stock has risen close to 323% in the past year!
by 5paisa Research Team 28/10/2021

On a YTD basis the stock has given investors a 285% return in 2021.

Bengaluru-based IT services firm, Happiest Minds Technologies Limited has given investors stellar returns of 323.97% over the last year. The share price stood at Rs 309.20 on October 27, 2020, and since then, the stock has more than quadrupled investors wealth who are betting on the strong growth prospects for digital IT services across the globe in the post-covid world.

Happiest Minds was listed on the exchanges in September 2020 at Rs 350 on NSE and Rs 351 on BSE, against its issue price of Rs 165 to Rs 166 per equity share. Today Happiest Minds share price has gone up to Rs 1300 (at 12:50 PM). When the Happiest Minds IPO was launched, the response was very positive as it had big-name Ashok Soota as Executive Chairman. Ashok Soota was one of the 10 founders of Mindtree and is widely recognized as one of the pioneering leaders of the Indian IT industry.

With regards to the business operations, Happiest Minds Technologies deals in the cloud and digital business, where huge corporate investment is expected post-Covid-19. With services such as cloud and security and analytics accounting for 97% of its revenues, and hence the company is being touted more as a digital services firm than legacy IT players. Hence, the business model of the company augurs strong revenue in future.

The IT firm reported its Q2FY22 numbers yesterday, October 27, 2021. Operating Revenues in US$ terms stood at US$ 35.8 million, registering a growth of 8.0% QoQ and 44.9% YoY. In Indian Rupees, revenue stood at Rs 264.53 crore, up by 8.1% QoQ and 44.7% YoY. EBITDA and PAT both grew impressively by 42% and 30.4% respectively. The IT company had 8 client additions in the quarter and the total client base stood at 186 as of September 30, 2021.

At 12.50 pm on Thursday, the stock is trading at Rs 1300, down by 0.83% or Rs 10.90 per share on BSE. The 52-week high of the scrip is recorded at Rs 1,580.80 and the 52-week low at Rs 285.55 on the BSE.

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These penny stocks are locked in the upper circuit on Thursday

These penny stocks are locked in the upper circuit on Thursday
by 5paisa Research Team 28/10/2021

On Thursday, the benchmark indices are trading in red dragged by oil and gas, realty and power stocks. Sensex has tanked beyond 1000 points and Nifty is more than 300 points down. About 789 shares have advanced, 2247 shares declined, and 95 shares are unchanged up till 3 pm.

IndusInd Bank, L&t, Ultratech Cement, Asian Paints and Bajaj Finance are the top 5 gainers in the Sensex group whereas ITC, ICICI Bank, Kotak Mahindra Bank, Titan and Axis Bank were among the top 5 losers within the index. The stocks of IndusInd Bank has made fresh 52-week highs in Thursday’s trading session on the back of strong quarterly results in Q2FY22.

In the broader markets, the BSE Midcap and BSE Smallcap indices are seen trading in red similar to benchmark indices declining 1.36% and 1.46%, respectively. IRCTC is holding the top position in the BSE Midcap index zooming more than 10% whereas, in the smallcap space, Gokul Agro Resources is shining after gaining beyond 9.5% on Thursday. In Thursday’s trading session, the stock of Indian Railway Catering & Tourism Corp (IRCTC) rose 15% as the stock traded ex-split.

On the sectoral front, all the sectoral indices are trading in red with BSE Realty index plunging 3.39% in Thursday’s trading session. The worst performing stock dragging the index is Godrej Properties contracting up to 4.59% followed by Indiabulls Real Estate, DLF, Brigade Enterprises and Sobha.

During the session, several penny stocks were seen outperforming the markets gaining up to 4.92%.

Following is the list of penny stocks that locked in the upper circuit on Thursday, October 28.

Sr. No   

Stocks   

LTP   

Price Gain (%)   

1  

Sintex Industries   

5.35  

4.9  

2  

Sintex Plastics Technology   

6.05  

4.31  

3  

Llyods Steel   

6.7  

4.69  

4  

Ankit Metal Power   

4.25  

4.94  

5  

Indosolar Ltd   

3.95  

3.95  

6  

Usha Martin   

5.15  

4.04  

7  

Eastern Silk   

4.75  

4.4  

8  

Parenteral Drug   

3.8  

4.11  

9  

Premier Ltd   

4.2  

5  

10  

PVP Ventures   

5.15  

4.04  

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Rajeev Thakkar - A disciplined fund manager

 Rajeev Thakkar - A disciplined fund manager
by 5paisa Research Team 28/10/2021

A value investor, a man of few words whose plethora of work in the investment industry speaks on his behalf.

Rajeev Thakkar is the Chief Investment Officer of PPFAS ( Parag Parikh Financial Advisory Services Ltd). His tenure with PPFAS started in 2001 and in 2007 he became the CEO of the Fund house. He has worked since the inception of the flagship scheme of the Portfolio Management Service, titled "Cognito"

A Chartered Accountant, Cost Accountant, CFA Charterholder and a CFP Certificant, Rajeev Thakkar is an epitome of a disciplined fund manager who is unshaken by the transitory events, his beliefs are firmly influenced by Warren Buffet and Charlie Munger, a value investor, a man of few words whose plethora of work in the investment industry speaks on his behalf.

Rajeev Thakkar possesses over two decades of experience in various segments of the Capital Markets such as investment banking, corporate finance, securities broking and managing clients' investments in equities. He is the face of PPFC( Parag Parikh Flexi Cap Fund) and PPTSF (Parag Parikh Tax Saver Fund), which has a track record of strong performance vis a vis their benchmark indices Nifty 500 and Nifty50 since inception.

The funds cater to long term value investors by deploying active management strategies across sectors, market capitalization and geographies.

Since its inception in 2013, PPFC has delivered an annualized return of 21.11% against 16.35% and 15.24% returns by Nifty 500 and Nifty50 respectively.

Since its inception in 2019, PPFTS has delivered an annualized return of 32.51% against 26.82% and 24.03% returns by Nifty 500 and Nifty50 respectively.

The exception was last one year, where the Flexi Cap Fund has delivered annualized return of 57.38% against 62.87% and 58.84% returns by aforesaid benchmarks respectively. The tax saver fund has delivered 49.13% for the said period but gave better risk-adjusted returns vis a vis the benchmarks.

In an interview, he exclaimed that six months before the pandemic he had no clue to predict the fall and the sharp recovery, so there is no reason he could predict the future of the market now.

That said, he is not a believer in playing the momentum game (not a fan of cyclical), his deep-rooted belief in the virtues of value investing, a keen eye for ferreting out undervalued companies by employing a diligent and disciplined approach has been instrumental in the stellar performance of the scheme.

Famous Quote by Rajeev Thakkar

“While the risk-mitigating factors does not work in your favour beyond a point as you go on adding stocks, you may also find it difficult to manage a large holding”

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