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Multibagger Alert: This energy exchange business has quadrupled investor wealth with a return of 301% in the past year!

 Multibagger Alert: This energy exchange business has quadrupled investor wealth with a return of 301% in the past year!
by 5paisa Research Team 09/11/2021

On a YTD basis, the stock has given a return of 242.89%.

The stock of India’s premier electricity exchange, Indian Energy Exchange (IEX) has given investors stellar returns of 301.72% over the last year. The share price stood at Rs 194.35 on November 6, 2020, and since then, the stock has more than quadrupled investor wealth.

Revenue for the quarter came in at Rs 110.4 crore, up 55.6% YoY and 21.1% QoQ. IEX registered an EBIDTA margin of 86.1% vs 82.2% QoQ, which is the highest ever in the company’s history. Absolute EBIDTA came in at Rs 95 crore as compared to Rs 74.9 crore in the last quarter. The company saw strong volumes in August and September whereas July witnessed a slight dip led by the second wave. PAT came in at Rs 77.4 crore, up 74.6% YoY & 24.6% QoQ.

Indian Energy Exchange Ltd engages in the power exchange business and provides an automated platform for the trading of electricity and related products. It facilitates the exchange of power between the generation (like NTPC, Tata Power, Adani Power) and energy distribution companies. It has a near-monopoly in this business, commanding a market share of 95% in the power exchange market. At present, only two companies are engaged in the business of power exchange - IEX and Power Exchange India Ltd (PXIL).

IEX’s primary revenue sources include transaction fees (about 84% of revenues) and annual subscription fees (5% of revenues). Since the commencement of its business in 2008, the trading volume on its exchange has been increasing at a staggering rate of over 32% CAGR, which has driven the top-line of the company.

Shares of IEX have seen strong traction over the last year due to the green energy theme playing out in the markets, as well as their near-monopoly status (with nearly 95% market share). The addition to the F&O segment in the latest series also came as an important tailwind.

Looking ahead, the company’s prospects remain positive given its clean balance sheet, near monopoly, regulatory tailwinds and introduction of newer products, which is expected to drive strong double-digit volume growth in the medium term.

At 12.20 pm on Tuesday, the stock is trading at Rs 787.55, up by 0.87% or Rs 6.80 per share on BSE. The 52-week high of the scrip is recorded at Rs 956.15 and the 52-week low at Rs 194.80 on the BSE.

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Nemish Shah - The man who took Infosys public!

Nemish Shah - The man who took Infosys public!
by 5paisa Research Team 09/11/2021

Here's a peek into the investment strategy of Nemish Shah, co-founder of ENAM Holdings.

Nemish Shah is an ace-investor who completed his Bachelor’s in Commerce (B.com) from Lala Lajpat Rai College, Mumbai University in 1977. He is the director and co-founder of ENAM Holdings, a privately owned and managed investment house.

Initially, ENAM was a broking entity, and it soon forayed into the investment banking profession. Throughout these developments, ENAM adhered to investment research as its backbone. In 2010, ENAM merged its investment banking and broking operations with Axis Bank in a deal valued at Rs 2,067 crore. At present, Shah manages the firm’s treasury operations and is focused on growing its proprietary capital, under ENAM Holding’s Pvt Ltd.

A little-known fact: Infosys, a leading Information technology giant, was taken public by ENAM in 1993. And at the time of issuance, the shares of Infosys were undersubscribed. It was Nemish Shah and Vallabh Bhanshali, co-founder of ENAM, who convinced people to invest in Infosys.

Investment philosophy of ENAM Holdings

ENAM holdings have a value-based and relationship-oriented culture and investment philosophy. The firm follows a fundamental, bottoms-up research approach for identifying companies with sustainable competitive advantages and execution capabilities. It gives huge importance to the quality of management teams and governance frameworks of the companies that it invests in.     

Furthermore, ENAM Holdings is an ethical firm that does not invest in businesses that involve intoxication, gambling or anything that harms living creatures. 

Investment strategy of Nemish Shah

The investor, who has been through various market cycles, looks for the following pre-requisites while selecting a company for investment:

A) The company’s ROCE should not be below 9%.

B) The company has planned future growth.

C) The company should have sound management.

D) And lastly, he should get a discounted entry price.
 

Coming to his personal portfolio, as per the information published by Trendlyne, Nemish Shah publicly holds 7 stocks and has a net worth of over Rs 1,260.9 crore.

Let’s take a look at the 7 stocks in his portfolio and their holding value:

  1. Lakshmi Machine Works Ltd (Rs 954.4 crore)  

  1. Elgi Equipments Ltd (Rs 119.4 crore)  

  1. EID Parry (India) Ltd (Rs 103.8 crore)  

  1. Bannari Amman Sugars Ltd (Rs 75.6 crore)  

  1. Zodiac clothing company Ltd (Rs 4.9 crore)  

  1. Rane Engine Valve Ltd (Rs 1.9 crore)  

  1. Super Spinning Mills Ltd (Rs 1 crore)

From his portfolio, it is quite evident that he doesn’t like to invest in a huge number of stocks and rather invests in a selected few stocks and have diversity in them.

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M&M beats street estimates with 29% jump in Q2 standalone profit

by 5paisa Research Team 09/11/2021

Automobile major Mahindra & Mahindra (M&M) reported better-than-expected results for the three months ended September 30, with both revenue and net profit coming ahead of what brokerages had projected.

Standalone net profit before exceptional items grew 29% from a year earlier to Rs 1,687 crore for the second quarter. This exceeded expectations that ranged between Rs 1,100 crore and Rs 1,500 crore. Net profit after accounting for exceptional items grew almost nine-fold to Rs 1,432 crore.

Consolidated net profit before exceptional items grew 43% to Rs 1,975 crore. The profit after factoring in the exceptional items rose threefold.

Standalone revenue grew 15% to Rs 13,305 crore as against expectations of around Rs 12,500 crore. This was powered by the automotive unit as farm equipment revenue growth was modest.

The company’s share price rose 2.12% and was trading at Rs 877.5 apiece in late afternoon trade on the BSE in a weak Mumbai market on Tuesday.

M&M Q2: Other Highlights

1) Standalone EBITDA declined 19% to Rs 1,660 crore from Rs 2,057 crore in Q2 FY21.

2) Total vehicle volume was up 9% at 99,334 compared with a year earlier.

3) Total tractor volume was, however, lower at 88,920 versus 93,246 in the year-ago quarter.

4) Farm equipment sector tractor market share at 40.1%, up 1.9% from Q2 FY2021.

5) M&M operating margin 12.5% despite rising commodity prices and shortage of semiconductors.

6) Strong exports volumes: Farm up 105% (highest ever in H1); Auto up 86% compared to Q2 FY2021

M&M management commentary

Anish Shah, managing director and CEO at M&M, said the company saw significant improvement in its performance this quarter. “Our strong show in the auto and farm sectors was complemented well by the improved performance in the group companies. Our investments in digital platforms are doing well and present a meaningful opportunity to create and unlock value,” he said.

Rajesh Jejurikar, executive director at M&M, said the farm equipment sector continued to deliver robust performance, both in terms of market share and financial metrics despite steep commodity inflation.

“We had a blockbuster XUV7OO launch witnessing bookings of more than 70,000. demand for our other key automotive products also remains strong. With better availability of semiconductors, we hope to maintain the volume growth momentum Q3 onwards. We are poised well to deliver very strong growth and returns through an exciting new product portfolio,” Jejurikar said.

Manoj Bhat, group chief financial officer at M&M, said commodity prices impacted margins in both the auto and farm business. However, M&M’s focus on cost management and optimization helped mitigate some of the impact.

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Check out the large cap stocks where FIIs increased stake in Q2

by 5paisa Research Team 09/11/2021

Indian stock indices are consolidating near their peaks and investors, anticipating a correction, are putting more money into large cap counters as they seek greater comfort rather than taking risks with mid- and small-cap stocks.

Foreign portfolio investors (FPIs) and foreign institutional investors (FIIs) have become more cautious about investing in India in recent months but quarterly shareholding data shows they pushed up their holding in more than 200 listed companies. In fact, they increased their stake by two percentage points or more in a fourth of these companies.

In particular, they hiked stake in as many as 89 companies that have a valuation of $1 billion or more in the second quarter through September. This compares with 83 companies where they put additional money in the previous quarter ended June 30.

Of these 89 companies, 48 were large-cap companies. In particular, FIIs were bullish on selective FMCG stocks, PSU banks and gas and power firms. In addition, FIIs also increased their stake in Tier-II pharmaceutical stocks, engineering companies, life insurers and a few automakers.

Top large caps that saw FII buying

If we look at the pack of large caps with a market valuation of Rs 20,000 crore ($2.6 billion) or more, then FIIs pushed up their stake in telecom firm Bharti Airtel, jewellery and watch company Titan, HDFC Life Insurance, engineering firm Siemens, electrical products maker Havells, Eicher Motors, Godrej Properties and state-run GAIL. The FIIs also upped their holding in FMCG companies Dabur, Tata Consumer and Marico.

Among others, Piramal Enterprises, SRF, Bank of Baroda, Bharat Electronics, HAL, Astral, Canara Bank, Alkem, NMDC, Varun Beverages, Voltas, Dalmia Bharat and Tata Elxsi also saw foreign portfolio investors picking up additional shares.

Lower down the order in terms of market cap were companies such as Petronet LNG, Max Financial, MRF, Coforge, NHPC, REC, Hatsun Agro, Ipca Laboratories, Laurus Labs, Indian Hotels and GMR Infrastructure.

The FIIs also bought more shares of ICICI Securities, M&M Financial Services, Oil India, Tata Chemicals, Indian Energy Exchange, Clean Science & Tech, Linde India, Aavas Financiers, IndiaMART, Federal Bank, CG Power, Gujarat Fluorochem and Godrej Industries during the second quarter.

While Dabur, Voltas, Bharat Electronics and Max Financial had also figured in the pack where FIIs bought more stake in the previous quarter ended June 30, most of these companies are different.

In the previous quarter, FIIs had picked up additional stake in India’s second- and third-largest software exporters—Infosys and Wipro—besides Axis Bank, Divi’s Labs, L&T, Grasim, Tata Steel, NTPC and Indian Oil.

Meanwhile, in over four dozen firms FIIs picked up 2% or more additional stake last quarter. Within this, firms with a market capitalisation of Rs 20,000 crore or more where the FIIs hiked stake by 2% or more include names like HDFC Life Insurance, Havells India, Godrej Properties, Voltas, Clean Science & Tech and Aavas Financiers.

In the previous quarter ended June, FIIs had taken a bullish view on technology firm Coforge (previously NIIT Technologies), SBI Cards, IDFC First Bank, Max Financial, Tata Steel, chemical manufacturers Aarti Industries and Graphite India, besides Voltas and Bharat Electronics.

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These stocks are likely to be in focus on November 10

These stocks are likely to be in focus on November 10
by 5paisa Research Team 09/11/2021

On Tuesday, the benchmark indices ended flat amid volatility. At close, the Sensex was down 112.16 points or 0.19% at 60,433.45, and the Nifty was down 24.20 points or 0.13% at 18,044.30. About 1958 shares have advanced, 1269 shares declined, and 162 shares are unchanged.

On the sectoral front, auto and capital goods indices rose 1% each, while buying was seen in the power, oil & gas, pharma names. Meanwhile, the metal and banking stocks faced pressure in Tuesday's trading session. In the broader markets, the BSE midcap index was up 0.8 % and smallcap index rose 0.67 %.

Watch out for these stocks for Wednesday's trading session.

Mahindra & Mahindra - The company declared quarterly results for Q2FY22. Net profit stood at Rs 1,929 crore against Rs 615 crore in Q2FY21. Revenue was up 14.8% at Rs 13,305 crore against Rs 11,590 crore on a YoY basis. EBITDA lowered 19.3% at Rs 1,660 crore against Rs 2,057.3 core (YoY) while EBITDA margin came in at 12.5% against 17.8% (YoY). The tractor segment saw the second-highest growth in terms of PBIT, domestic and export volume, whereas the farm business gained a market share of 1.9%.

JSW Steel– JSW Steel reported that the Crude Steel production for the month of October 2021 was at 14.25 lakh tons on a standalone basis. It also reported that the average capacity utilization for the month was 95%. The stock ended 1.23% lower in Tuesday's trading session and is likely to be in focus on Wednesday.

52-week high stocks – From the Sensex pack, the only stock that hit a fresh 52-week high price on Tuesday was Larsen & Toubro. The stock has touched a fresh price of Rs 1,964 per share. Keep a watch on this stock on Wednesday.

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Closing Bell: Market ends marginally lower, snaps two-day winning streak

Closing Bell: Market ends marginally lower, snaps two-day winning streak
by 5paisa Research Team 09/11/2021

Indian share market closed marginally lower on Tuesday as Sensex closed down by 110 points and Nifty slipped below 18,050.

Domestic benchmark indices snapped their two-day winning streak on Tuesday dragged by losses in HDFC, Bajaj Finance, Kotak Mahindra Bank, Maruti Suzuki, Axis Bank and HCL Technologies. During today's trading session, the Sensex fell as much as 332 points at the day's lowest level and the Nifty 50 index briefly went below its critical psychological level of 18,000. But the markets did make a turnaround and recovered most of their losses by the closing bell on the back of buying interest in Reliance Industries, ICICI Bank, Mahindra & Mahindra and State Bank of India.

At the closing bell on Tuesday, the Sensex was down 112.16 points or 0.19% at 60,433.45, and the Nifty was down 24.20 points or 0.13% at 18,044.30. On the market depth, around 1958 shares have advanced, 1269 shares declined, and 162 shares are unchanged.

Top gainers on a volatile trading session were M&M, L&T, SBI, ICICI Bank and Reliance Industries. Top losers included HDFC twins, Maruti, NTPC and Bajaj Finance.

On the sectoral front, auto and capital goods indices added 1% each, while buying is seen in the power, oil & gas, pharma names. Metal and banking names remained under pressure. In the broader markets, the BSE midcap index was up 0.8% and smallcap index rose 0.67%.

Among the trending stocks of the day, Mahindra & Mahindra rose 5.24% to close at Rs 904 after its profit jumped multifold to Rs 1,929 crore from Rs 136 crore in the year-ago period. Tata Motors, Hero MotoCorp, State Bank of India, ONGC, Reliance Industries, ICICI Bank, Adani Ports, Larsen & Toubro and Divi's Labs also rose between 0.8-1.9%.

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