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TCS 3640.45 (-0.07%)
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Titan Company 2369.25 (-0.72%)
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UPL 712.75 (2.08%)
Wipro 640.75 (-0.94%)

Difficult quarter for cement industry? Which cement stocks can you still invest in?

by 5paisa Research Team 20/10/2021

Heavy rains and the festival season have led to a roll back of price hikes to pass on high input costs. In Q2 FY22, the all India cement prices have been estimated to be around Rs.369 per bag. The price roll backs and depleted fuel stocks have kept the operational efficiency of cement sector, at a check. There was already an assumption that due to the second Covid-19 wave and a longer than usual monsoon season, the cement volumes would be low. Due to the late arrival of monsoon this year, the July production grew by 22.5% MoM but as expected, the cement consumption slumped in August- September owing to floods, high construction costs, funding issues etc.  The continuous acceleration in crude oil prices and exhaustion of low cost fuel stocks, didn’t help and mostly squeezed the operational performance. The coal prices increased 223% YoY and 55% QoQ. In Q2 FY22 the average price of fuel, diesel, petrol and pet-coke stood at $158 a tonne. A higher diesel price in-turn lead to a higher freight cost. Even though the cement price manufacturers tried their best to pass on the increased price of the inputs, the monsoon along with other factors mentioned before, kept the cement prices in check. According to a report by Anand Rathi, South/East cement prices declined 2.1%/5.3% QoQ due to floods, sand unavailability and high cement supply pressures after a hike in prices in the first quarter of FY22. The North and West prices were up by 3.5% and 4.1% QoQ respectively and the Central regions were steady. According to an ICRA report the cement sector production is estimated to go up 12% to 330m tonnes in FY22. 
Few favoured stocks in the cement sector-

Ramco Cements
Ramco cements is one of southern India’s largest cement companies with a capacity of 19.4m tpa. It is also expanding its operations into the eastern part of India. The company is in the middle of an expansion at various sites to increase the capacity to 20.4m tonnes and also add in clinker capacity expansion, a WHRS and a railway sliding. A capital expenditure of Rs.35 billion is estimated and set aside for this. The strategic location of these factories help in the decrease of transportation cost and thus increase the operational efficiency. 
The ROE in FY21 stood at 14.4% and estimated to decline to 13.6% in FY22 due to the losses faced in this quarter and also due to the pandemic. 

Birla Corp
This company serves the North, East and Central parts of the country.  The reason this company appears in the favoured list is because of its low cost structure, capacity expansion and favourable mix of regions served. Due to the recent acquisitions of coal mines, the fuel costs will be relatively lower than others and lead to maximum optimization of efficiency and resources. In FY 21, the company also reduced its gross debt by Rs.2.36 billion. With this streak of profitability continuing, it can prove to be a good stock to hold in the portfolio for the long term. 

Orient Cements
The main markets of this company is Maharashtra (50%), Telangana/AP/ Karnataka (35%) and MP (10%). The main three markets provide a revenue of 85% to the company. The company has two cutting edge cement manufacturing plants- in Devapur and Chittapur, along with a clinker grinding unit at Jalgaon. It is also planning on constructing a 3m tonne unit in Devapur and a split GU in Maharashtra or AP by FY24. These expansions will help the company gain in volume produced as the market penetration increases.  In FY21, the company repaid Rs. 4.21 billion in debt. A good working capital management will also aid in funding these expansion projects, efficiently. 

Dalmia Bharat
Dalmia Bharat is the Fourth largest cement group with a presence in East, South and North-east India. They have a 33m tonnes capacity. The company has plans to expand its capacity to 48.5m tonnes by FY24. They have a target of 15% CAGR capacity growth. Their main aim is to expand in North and Central India- all India operations, in the next phase of expansions. Also, they are aiming at 14%-15% ROCE in the next few years. As of FY21, the ROCE stands at 8.4%. The company has great focus on expanding into green energy, divesting non-core assets and improving the return ratios as mentioned above. 

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Ganesha Ecosphere signs mutual collaboration agreement with Applied DNA Sciences.

Ganesha Ecosphere signs mutual collaboration agreement with Applied DNA Sciences.
by 5paisa Research Team 20/10/2021

The agreement will enable Ganesha Ecosphere to introduce and apply CertainT-verified rPET to provide assurance for the raw material with textile and apparel customers.

Applied DNA Sciences which is listed on the NASDAQ and is a leader in Polymerase Chain Reaction (PCR)-based DNA manufacturing and nucleic acid-based technologies, has recently announced the signing of a mutual collaboration agreement with BSE listed Ganesha Ecosphere.

Ganesha Ecosphere is the largest recycled polyester (rPET) fibre producer in India with over 300-plus customers, 250-plus suppliers and 500-plus product variants.

Under the terms of the agreement, Ganesha Ecosphere will deploy the CertainT® platform, Applied DNA's traceability system, to tag an initial pilot production of recycled polyester (rPET) at the company's facilities in India and conduct confirmatory sample testing at Applied DNA's laboratories in India and the US. The collaboration between the two companies will provide brands and textile manufacturers with a trusted solution to support their sustainability goals for rPET and confirm raw material authenticity at all stages of the textile value chain.

The agreement will enable Ganesha Ecosphere to introduce and apply CertainT-verified rPET to provide assurance for the raw material with textile and apparel customers. Ganesha will also employ Applied DNA's recently introduced SigNature® T-100 tracer system that enables rPET source material to be quantified in polyester blends by the CertainT platform. SigNature T-100 is a proprietary molecular-based tracer system used to identify, analyze, and verify rPET, polypropylene, acrylic and potentially other man-made materials for claims of both identification and quantification of the raw material tagged and subsequently spun into yarn for various textile products.

BP Sultania, Joint President of Ganesha Ecosphere has stated in a filing with the exchange that, “Traceability has now added more authenticity and credibility to the entire textile supply chain and is becoming an integral part of the recycling process. With Applied DNA and CertainT, our customers can now trust in the original tagged synthetic fibre and verify product-related sustainability claims."

Ganesha Ecosphere Ltd is a leading PET Waste Recycling company in India and is engaged in the manufacturing of Recycled Polyester Staple Fibre (RPSF), Spun yarn and dyed texturized yarn in India.

Shares of Ganesha Ecosphere jumped more than 2% during early market hours to touch an intra-day high of Rs 508.45 per share on Wednesday, 20 October 2021.

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These Penny Stocks are locked in the Upper Circuit on Wednesday.

These Penny Stocks are locked in the Upper Circuit on Wednesday.
by 5paisa Research Team 20/10/2021

The markets are trading volatile on Wednesday after closing in red on Tuesday. BSE Sensex on Wednesday is supported by the stellar performance of Bharti Airtel, SBI, Indus Ind Bank, ICICI Bank and Tech Mahindra. BSE Sensex is trading with gains of over 50 odd points.

The BSE Smallcap index is down by more than 1% while the BSE Midcap index slipped by 0.5% on Wednesday. Barring BSE Bankex and BSE Telecom index, all the other sectoral indices are trading in red.

Shares of the State Bank of India are trading with gains of more than 3% in Wednesday's trading session on an intraday basis. BSE Bankex is also helped by City Union Bank shares, which are up by 1.54%. Federal Bank shares are up by a little over 1% while Bandhan Bank share price is up by 1%.

Kotak Mahindra Bank and HDFC Bank are trading with minor losses on Wednesday.

BSE Telecom index is up by over 3%. Bharti Airtel shares are up by over 3% while Vodafone Idea shares have zoomed by over 5% thus helping the BSE Telecom index shine on a relatively volatile day for the markets. The share price of Indus Tower is up by over 3% on Wednesday.

Several penny stocks are seen outperforming the markets even as few of the penny stocks are locked in the upper circuit on Wednesday.

Following is the list of penny stocks that are locked in the upper circuit:
 

Sr No   

Stock Name   

LTP   

Price Gain (%)  

1  

Vikas Multicorp   

4  

3.9  

2  

Gayatri Highways   

1  

5.26  

3  

Viji Finance   

2.3  

4.55  

4  

Setubandhan Infra   

1.35  

3.85  

5  

Sathavahana ISP   

3.05  

3.39  

6  

Continental Seeds   

8.85  

4.73  

7  

Paranteral Drug   

3.2  

4.92  

8  

TV Vision   

2.5  

4.17  

9  

Hotel Rugby   

3.2  

4.92  

10  

Ankit Metal & Power 

3.3  

4.76  

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Low Priced Stocks: These stocks are locked in the upper circuit when Sensex is down by more than 100 points.

Low Priced Stocks: These stocks are locked in the upper circuit when Sensex is down by more than 100 points.
by 5paisa Research Team 20/10/2021

BSE Sensex is trading with losses on Wednesday as investors indulge in profit booking at all-time high levels. The earnings season so far has driven the markets higher in past one week.

Profit booking is seen in some of the trending Tata Group stocks such as Tata Motors and Tata Power. The shares of Tata Power are trading down by more than 1% while the shares of Tata Motors are trading flat, on an intraday basis.

The banks are seen outperforming along with the telecom stocks. SBI is the top banking gainer while Vodafone Idea is the top telecom gainer on Wednesday.

The IT stocks are trading mixed with the shares of Mastek falling by more than 13% while the shares of Tech Mahindra and HCL Tech gain more than 1% each.

The shares of Deepak Nitrate slipped by 8% ahead of its Q2FY22 results. The results will be declared on October 27. In the early hours of the trade, the stock was down by 10% and locked in the lower circuit. The shares of CG Power are locked in the upper circuit on Wednesday on an intraday basis.

Several low priced stocks or stocks that trade below Rs 100 per share were seen outperforming the markets with a few of them locked in the upper circuit.

Following is the list of the low priced stocks that are locked in the upper circuit:

Sr No   

Stock Name   

LTP (Rs) 

Price Gain (%)  

1  

Digjam   

19  

4.97  

2  

Rohit Ferro-Tech   

12.85  

4.9  

3  

One point one solution   

41.25  

4.96  

4  

Tilak Nagar Industries   

49.1  

4.91  

5  

Imagica World Entertainment  

13.2  

4.76  

6  

Visa Steel Ltd   

15.1  

4.86  

7  

Eurotex Industries   

14.7  

5  

8  

Standard Industries   

16.15  

4.87  

9  

We Win   

30.35  

4.84  

10 

Lyka Lab   

89.1  

4.95  

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Mutual funds that hold IRCTC shares.

Mutual funds that hold IRCTC shares.
by 5paisa Research Team 20/10/2021

The shares of IRCTC have fallen by more than 22% from their high in a single day. Read on to find the funds that hold maximum IRCTC shares.

On October 19, shares of IRCTC made a new high of Rs 6393. In the last month, the share price of IRCTC has moved up by 72%. From the low of Rs 3700 on September 2021, there was an unstoppable one-way vertical move in the share price of the company before it came to a scratching halt in yesterday’s trade. It is down by 13% in today’s trade after witnessing a fall of 22% in Tuesday's trading session. From the high of Tuesday, the share price of IRCTC is down by 27%.

Analysis of holdings of mutual funds at the end of September 2021 shows that 85 funds hold shares of IRCTC and were net sellers in the month of August and September. It was only Edelweiss Recently Listed IPO Fund, which remained the net buyer of the company’s shares in September. Nevertheless, the fund that is going to get impacted most due to the fall in the price of IRCTC is Motilal Oswal Midcap 30 Fund, which holds 8.99% of its assets in the share of IRCTC. On October 19, the NAV of the fund fell by 1.56%.

Following is the list of funds that hold the highest percentage of IRCTC’s share in their portfolio.
 

Fund Name  

Fund Manager  

Sep-21  

Sep-21  

Sep-21  

Aug-21  

Jul-21  

Jun-21  

   

   

AUM (in Rs. cr)  

% of AUM  

No. of Shares  

No. of Shares  

No. of Shares  

No. of Shares  

Motilal Oswal Midcap 30 Fund-Reg(G)  

Niket Shah  

2366.6  

8.99  

560000  

600000  

600000  

600000  

Edelweiss Recently Listed IPO Fund-Reg(G)  

Bhavesh Jain  

805  

5.77  

122300  

62500  

115000  

90000  

IDBI Flexi Cap Fund(G)  

Alok Ranjan  

378.8  

4.04  

40306  

40306  

40306  

40306  

IDBI Focused 30 Equity Fund-Reg(G)  

Alok Ranjan  

145.8  

3.79  

14549  

18049  

18049  

18049  

Baroda Mid-cap Fund(G)  

Sanjay Chawla  

76  

3.75  

7500  

13000  

13000  

15000  

Tata Digital India Fund-Reg(G)  

Meeta Shetty  

3469  

3.55  

323816  

403816  

338816  

203816  

Baroda ELSS 96(G)  

Sanjay Chawla  

217.7  

3.05  

17500  

25000  

30000  

30000  

Baroda Hybrid Equity Fund(G)  

Sanjay Chawla  

413.6  

3.03  

33000  

40000  

40000  

40000  

Baroda Multi Cap Fund(G)  

Sanjay Chawla  

1155.6  

2.96  

90000  

135000  

135000  

140000  

IDBI Midcap Fund(G)  

Alok Ranjan  

214.7  

2.83  

16000  

22000  

22000  

15000  

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Exploring new horizons-Kotak Mahindra Bank

20/10/2021

Kotak Mahindra Bank-An Overview 
Kotak Mahindra Bank (KMB) is one of India's leading banking and financial services group, offering a wide range of financial services.KMB has transformed from an NBFC (non-banking financial company) into one of the fastest-growing banks in India after obtaining a banking license in 2003. The bank offers personal finance solutions from savings accounts to credit cards, distribution of mutual funds to life insurance products. Kotak Mahindra Bank offers transaction banking, operates lending verticals, manages IPOs, and provides working capital loans. Kotak has one of the largest and most respected Wealth Management teams in India, providing the widest range of solutions to high-net-worth individuals, entrepreneurs, business families, and working professionals. Over the years, it has entered various financial service businesses, such as securities, investment banking, life insurance, asset management, and retail banking, and it has become a leading player in domestic capital markets. 

Recent updates from the company shows that the growth appetite improved a bit in retail & SME, the large corporate lending still not big focus despite bank's low funding cost,bank is open to new opportunities, prefering credit cards, gold, & MFI loans,succession will offer scope to reorg. teams & look at fresh talent — our base case is internal elevation for CEO. Growth uptick & succession will be key to stock returns.
Bank has scaled up liability franchise well with Casa ratio of 60% but it has been conservative about growing the large corporate book due to predicted lower yields. Limited changes are found to that outlook, and even if book starts to grow from here, it may lag the retail piece. Recently, Kotak group acquired a small vehicle financing arm of Volkswagen India that gave them Rs13bn of loans (0.5% of consolidated loans) and 30k customers. Management is open to new opportunities in new areas such like credit cards, gold financing and MFI Kotak intends to acquire Citibank's India credit card business which would provide more contributions to loans.

So the quality of cross-sell to these customers will be key to value creation, with 
valuation estimated at US$2.5-3bn.As the Bank prepares for succession after retirement of Mr. Uday Kotak (Promoter and CEO) and Mr. Dipak Gupta (Jt. MD) in Dec-23, it is taking a holistic view about it. Mr. Kotak might return as non-executive director for a reasonable term (up to 8yrs) to guide the bank. Bank seems to be open to choices from inside and outside the bank and to make required changes in the team. 
There will be preference to recruit fresh talent from tech-domains. Mr. Manian (Group President, Corp & Investment banking)launched bank's consumer franchise &. Mr Shah (Group President in charge of key subsidiaries) are likely key contenders.So far, among large private banks, only Axis Bank has appointed CEOs from outside.While there is time for succession planning, pickup in growth and clarity on plans will be key to valuation re-rating. 

Parameters to kickstart investing in Kotak
The bank owned a total assests of Rs.3602517mn in FY20 which grew upto Rs.3834886 mn.Net profit increase from Rs.59472mn in FY20 to Rs.69649mn in FY21.P/E ratio is 43.Earning Per Share grew from 31 to 35 from FY20 to FY21.Like al other banks, Kotak also faced challenged due to COVID-19.But the effect is comparatively lower.

 

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