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Multibagger Alert: This Textile company has given investors a return of 136% in the past year

Multibagger Alert: This Textile company has given investors a return of 136% in the past year
by 5paisa Research Team 18/11/2021

On a YTD basis, the stock has given a return of 87.63%.

One of the largest domestic yarn producers in India, Vardhman Textiles has given investors stellar returns of 136.44% over the last year. The share price stood at Rs 860.65 on November 17, 2020, and since then, the stock has more than doubled investor wealth.

Vardhman Textiles, formerly known as Mahavir Spinning, is part of the Vardhman Group, a large textile conglomerate with a presence across the textile value chain. Vardhman is among the few textile companies that have been able to maintain a debt-equity ratio below one despite continuous capacity addition. Its healthy cash flows have enabled the company to reduce debt by around Rs 152 crore in FY21. In the same period, the debt to equity ratio of the company stood at 0.3x.

The company reported its highest quarterly revenue and PAT numbers in Q2FY22. During the latest quarter, revenue grew 47% YoY and 24% QoQ to Rs 2385 crore. Gross margin expanded on a QoQ basis by 107 bps to 55.9%, while operating leverage led to EBITDA margin expansion of 1946 bps YoY (on a low base last year) and 360 bps QoQ to 28.4%. EBITDA was higher by 3.7x YoY and was reported at Rs 676 crore. Consequently, PAT grew by 7.6x YoY to Rs 481 crore.

Vardhman Textiles has a project Capex plan of Rs 1900 crore over FY22-23 for yarn capacity expansion with Rs 700 crore for ongoing expansion of 1,00,000 spindles. The company also plans to further expand its spindle capacity by 1,65,000 and would be incurring a Capex of Rs 1200 crore. The new expansion would start contributing to revenues from FY24.

With global retailers looking to de-risking their supply chains, Vardhman Textiles is expected to be a key beneficiary in the yarn and fabric segment.

At 1.20 pm on Thursday, the stock is trading at Rs 2014.25, down by 1.01% or Rs 20.65 per share on BSE. The 52-week high of the scrip is recorded at Rs 2,198.85 and the 52-week low at Rs 805.25 on the BSE.

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Escorts Ltd zooms after Kubota Corporation increases stake in the company

Escorts Ltd zooms after Kubota Corporation increases stake in the company
by 5paisa Research Team 18/11/2021

This is set to become one of the largest Indo-Japan agriculture collaborations, providing Escorts access to the global supply chain and network.

Escorts Ltd, an Indian multinational company that operates in the high-growth sectors of agri machinery, material handling, construction equipment and railway equipment, announced today that it has entered into an agreement with Kubota Corporation, one of the company’s investors, to increase the latter’s stake in the company.

At present, Kubota owns a 9.09% stake in the company, which is set to increase to 14.99%. This will be done by way of preferential allotment, in which, Escorts shall issue 93,63,726 equity shares with a face value of Rs 10 at an issue price of Rs 2,000 aggregating to Rs 1,872.74 crore.

Pursuant to the transaction, Kubota will become a Joint Promoter along with existing promoters of Escorts. Also, in accordance with the SEBI Regulations, it shall make an open offer to the public shareholders of Escorts to acquire up to 26% of the share capital.

While the preferential allotment and open offer are expected to be completed by March 2022, the company’s name has been proposed to be changed to ‘Escorts Kubota Limited’. It shall be the exclusive vehicle for the manufacture and sale of certain products in India and for sourcing from India. The company’s R&D capabilities shall undergo an enhancement that will lead to state-of-the-art product offerings. The collaboration will provide Escorts access to a global supply chain & network.  

Moreover, with an intention of making Escorts the exclusive vehicle of business in India, both the parties are considering a merger of their joint ventures Kubota Agricultural Machinery India Pvt. Ltd (KAI) and Escorts Kubota India Private Limited (EKI).

At 2.39 pm, the share price of Escorts Ltd was trading at Rs 1,815.7, up by 11.38% from the previous day’s closing price of Rs 1630.15 on BSE.

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Superstar stocks for tomorrow!

Superstar stocks for tomorrow!
by 5paisa Research Team 18/11/2021

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.

Shipping Corporation of India Limited: The stock has rocketed by 8.38% on Thursday and has approached its all-time high level of 145. It witnessed a four-fold increase in volumes from its previous day’s volume indicating active participation from the institutions. Huge volume was recorded in the second half of Thursday's trading session. The stock trades above all key moving averages, and the RSI is also strong at 64. We could possibly see the stock breaking its record high from hereon as we observe big volumes for a few days. The stock traded firmly in green throughout the day. One should include it in their watchlist given the potential it has for the coming days.

Escorts India: The stock jumped a whopping 10.68% on the trading session of Thursday, as it tends to achieve newer highs. It witnessed heavy volumes of about 17 million which is also the highest in many months. With RSI already above 72, the stock looks to be super bullish already. With the stock showing no signs of slowing down, one can expect the stock to be trading at even higher prices for upcoming trading sessions.

Cyient: The stock of Cyient gained about 3.41% when the overall market was in red. It looks to continue the momentum as it is up nearly 100 points from its recent low in just 3 trading sessions. The stock witnessed huge buying at lower levels forming a wick at the bottom. The stock recorded big volumes as the session comes to an end. The RSI is in bullish territory and looks attractive for BTST trade.

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The richest and the smartest banker in Forbes Billionaire – Uday Kotak

The richest and the smartest banker in Forbes Billionaire – Uday Kotak
by 5paisa Research Team 18/11/2021

The only banker on Forbes Billionaires 2021 is the Managing Director and CEO of Kotak Mahindra Bank – Uday Kotak. The billionaire bankers wealth stands at USD 16.7 billion as of date.

Hailing from an upper middle Gujarati family, a young Kotak started a bank with a seed capital of USD 80,000 which went on to become India’s fourth-largest (by Market Capitalization) scheduled Commercial Bank and third largest among Private Commercial Banks. Kotak Mahindra Bank boasts a market capitalization of Rs 403,012 crore or USD 53.8 billion.

Uday Kotak has featured in the prestigious list of Forbes Billionaires 2020 at 129th spot, the same year he was the 8th richest in India, which is unchallenged to date. The fortune he has created is not a windfall but is a result of his grit, business acumen, foresightedness with an undercurrent to create value at large. His focus has been to make the financial service conglomerate sustainable and durable, not just by smart strategies but with unassailable governance.

The various milestones in the corporate lifecycle of Kotak Mahindra Bank from a bill discounting business to lease and hire purchase business, auto finance to investment banking to launch of India’s first Gilt Fund, bear testimony to its leader, Uday Kotak’s foresightedness and in perfect harmony of this mounting fortune.

In February 2003, Kotak Mahindra Finance Ltd. (KMFL), the Group's flagship company, received a banking license from the Reserve Bank of India (RBI), becoming the first non-banking finance company in India to convert into a bank - Kotak Mahindra Bank Ltd.

In November 2014, the accession of ING Vyasa Banks India operation in a USD 2.4 billion deal turned the tables for KMBL, cementing its position in the top 4 banks in the Private Sector. Owing to this, Kotak almost doubled his wealth by USD 2 billion as shares of his Kotak Mahindra Bank hit an all-time high. That year the bank picked up a 15 per cent stake in MCX, India's largest commodities exchange.

In 2015, Kotak Mahindra Bank Ltd (KMBL) forayed into the General Insurance business, upon receiving approval from the RBI. In a separate venture, he has teamed up with telecom magnate Sunil Mittal's Airtel M-Commerce to start a payments bank to provide basic banking services. That year Uday Kotak was ranked 12th richest Indian with a wealth of USD 6.5 billion.

In 2020, while the world was grappling with the harsh blows of the pandemic, KMBL had slowed down its growth engine, particularly on unsecured retail even before the COVID pandemic. It has consistently maintained a low net NPA below 1.5 per cent (second lowest) while an LCR ratio of 150 per cent and CASA Ratio of 53.7 per cent (highest among the banks). In June 2020, Kotak sold some shares to reduce his stake in the bank as mandated by the Reserve Bank of India. He featured in the Forbes Billionaire List 2020 at a valuation of USD 10.4 billion at 129th spot.

As of the quarter ended September 2021, Uday Kotak’s stake in KMPL stands at 26 per cent, as mandated by the RBI.

“As far as I'm concerned, becoming the world's richest banker is only a proxy for Uday being one of the world's smartest bankers," quipped Anand Mahindra, whose association with the banker dates back to 1986.

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Billionaire Sridhar Vembu - The brain behind Zoho Corporation

Billionaire Sridhar Vembu - The brain behind Zoho Corporation
by 5paisa Research Team 18/11/2021

A man with simplicity and vision has created a product-based IT company and succeeded in the journey by delivering top class software products.

Sridhar Vembu has a net worth of US$ 2.44 billion (Rupees – 17,940 Crore), making him one of the richest men in India. He is the 59th richest Indian and was awarded India’s fourth-highest civilian award, the Padma Shri, in 2021.

He is an Indian Business tycoon founder and chief executive officer (CEO) of Zoho Corporation, focusing on providing SaaS support to Customer relationship management services.

Zoho – Top class products at a cheaper price

Vembu has followed a number of unique strategies to build Zoho. These include creating a product that is very similar to Salesforce's customer relationship management product but dramatically slashed the pricing on it, making it affordable and attractive for small businesses. 

Over time, Zoho has applied the same model of copying successful products by Google, Microsoft, etc to create a broad portfolio that caters to small businesses very effectively.  

Zoho digitises businesses with apps that handle tasks ranging from customer acquisition and management to sales and customer support and has 4.5 crore users across 180 countries.

Zoho has more than 40 apps for its Zoho One product alone. Vembu says his vision for Zoho is that it will be the software that drives all functions for businesses from sales to finance with competitive pricing from US$1 per employee a day.

Exceptional educational background

Sridhar Vembu born on 1968 at Tanjore, Tamil Nadu. In 1989, he did Bachelor in Electrical Engineering from the IIT, Madras. Later, he studied MS and PhD degrees from Princeton University in New Jersey. 

In 1994, Sridhar started his career at Qualcomm as a wireless engineer in San Diego, California. He saw opportunities for software business in India, within two years, in 1996, Vembu founded a software development house for network equipment providers called AdventNet with two siblings and three friends. In 2009, the company was renamed Zoho Corporation.

Before the Covid-19 pandemic struck India, he moved to Mathalamparai, a village near Tenkasi. The motive was to encourage more people facilities to shift to villages as Indian cities have started to face major challenges. 

Such a fascinating story, In India he is one of the leading startup founders in IT products space, and that gave inspiration and pathway to lot of other IT startup founders.

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Top swing trading ideas you should not miss!

Top swing trading ideas you should not miss!
by 5paisa Research Team 18/11/2021

Best Swing Trading ideas based on price and volume percentage surge. Varun Beverages Limited, IRB Infra and Radico Khaitan

Price and volume are two of the most prominent inputs used by traders across the world while swing trading. When used in isolation, they reveal very little but when used in conjunction, they help us to sort the wheat from the chaff. So, this swing trading system is based on the deadly combination of price and volume percentage surge, which helps us to discover high probability swing-trading candidates.

So, here is the list of stocks that fulfil the criteria of volume and price surge and as a result, they flash in our swing-trading system:

Varun Beverages Limited: The stock gained 2% on Thursday as it trades near its all-time high and just above its 20 and 50-DMA. It has formed a strong bullish candle on the chart with a bigger volume. The directional movement indicator shows strength in the stock and RSI is going strong at 56. A strong chart pattern along with above-average volume makes VBL an attractive stock for swing trading.

IRB Infra: The infrastructure company shot up nearly 4.5% on Thursday, as it looks for a reversal. The stock was in correction mode for a few days after touching its all-time high level of 345. It has taken support at its 50-DMA and RSI shows the sign of reversal. and has witnessed rising volumes in a few trading sessions. With the technical parameters showing signs of reversal, this stock should certainly be on the trader’s watchlist for upcoming days.

Radico Khaitan: The stock gained 0.2% in the trading session that ended Thursday when the broader indices were bleeding. The stock has witnessed some profit booking today towards the end. The RSI still shows strength in the stock as it lies at 60. We see that the volumes are steadily increasing since the past few days as it nears its all-time high. The stock trades above all key moving averages and we could possibly see a trend in the coming days. The stock looks to gain momentum and is an ideal candidate for swing trade.

 

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