Nifty 18210.95 (-0.31%)
Sensex 61143.33 (-0.34%)
Nifty Bank 40874.35 (-0.88%)
Nifty IT 35503.9 (0.97%)
Nifty Financial Services 19504.75 (-0.74%)
Adani Ports 745.85 (-0.54%)
Asian Paints 3094.65 (4.20%)
Axis Bank 787.50 (-6.46%)
B P C L 427.70 (-0.78%)
Bajaj Auto 3776.50 (-0.40%)
Bajaj Finance 7482.15 (-4.75%)
Bajaj Finserv 18012.00 (-1.86%)
Bharti Airtel 702.35 (0.88%)
Britannia Inds. 3697.85 (0.14%)
Cipla 922.50 (1.65%)
Coal India 173.60 (-0.83%)
Divis Lab. 5149.35 (2.60%)
Dr Reddys Labs 4662.70 (-0.08%)
Eicher Motors 2583.90 (-0.25%)
Grasim Inds 1728.40 (-0.63%)
H D F C 2915.00 (0.12%)
HCL Technologies 1177.15 (0.89%)
HDFC Bank 1642.80 (-0.60%)
HDFC Life Insur. 693.85 (0.55%)
Hero Motocorp 2690.15 (-0.38%)
Hind. Unilever 2396.60 (-1.65%)
Hindalco Inds. 479.85 (-1.28%)
I O C L 130.80 (-0.53%)
ICICI Bank 835.00 (0.68%)
IndusInd Bank 1142.55 (-1.07%)
Infosys 1728.95 (1.48%)
ITC 238.45 (0.74%)
JSW Steel 684.90 (-1.36%)
Kotak Mah. Bank 2188.25 (-1.03%)
Larsen & Toubro 1784.55 (-0.65%)
M & M 886.80 (-0.87%)
Maruti Suzuki 7356.25 (0.81%)
Nestle India 19004.60 (-1.11%)
NTPC 141.30 (-1.33%)
O N G C 157.90 (-3.19%)
Power Grid Corpn 190.25 (-0.08%)
Reliance Industr 2627.40 (-1.26%)
SBI Life Insuran 1186.00 (1.19%)
Shree Cement 28107.75 (1.19%)
St Bk of India 519.15 (1.29%)
Sun Pharma.Inds. 825.10 (1.43%)
Tata Consumer 818.75 (1.22%)
Tata Motors 497.90 (-2.11%)
Tata Steel 1326.15 (-1.30%)
TCS 3489.75 (0.21%)
Tech Mahindra 1567.85 (0.29%)
Titan Company 2460.10 (0.22%)
UltraTech Cem. 7354.20 (1.17%)
UPL 741.50 (3.96%)
Wipro 671.10 (0.44%)

Specialty chemicals valuations high but investors can play on growth curve of these stocks

Specialty chemicals
28/09/2021

Indian specialty chemicals sector has tagged along with the frothy surge in local stock market indices. While this may turn off investors given high valuations in the sector at large, the macro growth opportunities can be a reason why one can still look at stocks selectively in the space, according to analysts at Kotak Securities.

One-year forward earnings multiples for the sector have re-rated to 55x, over two times their historical level. This brings scepticism for investors but there are some strong factors that provide comfort.

This is driven by lower cost of equity led by lower risk-free rates and improved investor comfort on longevity of earnings.

“We believe investor comfort will sustain given the long growth runway and healthy sector RoCE along with high reinvestment rates; however, we note that sector valuations will be highly sensitive to CoE changes. Importantly, earnings growth is likely to sustain, especially for our scalability candidates,” according to Kotak Securities.

What’s behind the positive macro picture for specialty chemicals?

The brokerage house feels Indian specialty chemicals companies are poised to ride tailwinds from macro drivers including ‘China+1’ strategy of global consumers of the product, import substitution within the country, growing costs within China (capital, operational, compliances) and currency benefits.

It noted that India has just 4% share of the global chemicals market that is growing at 5-6% in dollar terms. Even a 15% CAGR in rupee terms over next 15 years would garner just 8% global market share.

This is modest given the expected and strategic lowering of chemical exports by China that represents 13-15% chunk of the global market.

But instead of a top-down approach one should look at a bottoms up picture to identity real beneficiaries of sector macros, one that can leverage innovation and create sustainable business models.

Which specialty chemical stocks to pick?

According to Kotak Securities, companies that are able to scale-up will be marked by their ability to build entry barriers based on novel chemical process and continuously expand into related fields, upgrade R&D talent and allocate capital prudently to leverage organic investments as well as drive strategic M&As and global partnerships.

In particular, while there is a long runway, investors should chase scalability not valuations, according to Kotak Securities that has initiated coverage on the sector.

It has picked stocks based on growth of outsourcing and supply chain diversification, which benefits contract manufacturers like PI Industries, SRF and Navin Fluorine; import substitution that propels manufacturers like Aarti and Atul and growth in niche applications, which drives opportunities for Clean Science and Vinati. But not all are a buy at current levels.

Aarti Industries (BUY: CMP 932.2: FV 1080, upside: 16%) The firm is a play on aggressive import substitution play and its move into downstream aromatics. After stagnant earnings over FY2019-21, it is now poised for a sharp trajectory along with RoCE improvement.

Vinati Organics (BUY: CMP 1888: FV 2200, upside: 16.5%) Its strong earnings growth has been led by revival of ATBS demand from Europe and the US, alongside growing new applications driving full absorption of higher capacity besides ramp up of butyl phenols, new IB derivatives and recent foray into antioxidants.

Atul Ltd (ADD: CMP 9387.45: FV 10,000, upside: 6.5%) The company differentiates itself through its vast infrastructure, presence across multiple verticals and calibrated capex leading to superior RoIC and healthy has strong free cash flow generation. But the company is likely to lag peers in terms of growth.

SRF Ltd (ADD: CMP 11027: FV 12,000, upside: 8.8%) SRF has effectively used cashflows from its legacy businesses to support growth investments driving 33% CAGR growth in earnings and expansion of RoE to 20% from 8% over FY2014-21. Its chemicals business that contributes 45% of revenue can grow at 20% CAGR over next 10 years while refrigerants emerge as its next growth engine.

PI Inds (ADD: CMP 3144.25: FV 3500, upside: 11.3%) The company boasts of a strong track record of growth (23% EPS CAGR over FY2018-21, 28% over the past decade) and RoCE (20%+ over past decade) and differentiated R&D investment (4% of sales) driving success in innovator partnerships.

Clean Science (REDUCECMP 2058: FV 1950), The company outshines peers on high RoCE (~74%) along with healthy growth, driving healthy fresh cash flow generation but the run-up in valuations leaves limited room for gains at the current price.

Navin Fluorine (REDUCECMP 3752: FV 3750) It is uniquely placed among contract manufacturers given its niche expertise in a growing but complex chemistry – fluorination and presence in multiple industry verticals. But its rich valuations are not cognizant of risks of delay in commissioning current projects. There is also a lag between new project announcements and the brisk pace of re-rating.

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Small-cap stocks: Keep a close eye on these trending stocks for tomorrow!

Small-cap stocks In Focus
by 5paisa Research Team 28/09/2021

28 September 2021, Tuesday saw a decent correction in stock markets as both headline indices Nifty and Sensex ended below critical levels of 17,800 and 60,000 respectively. Power Gird Corporation, Coal India, Indian Oil Corporation and NTPC were top blue-chip gainers. Whereas Bharti Airtel, Tech Mahindra and Bajaj Finance were top losers. Nifty Bank closed the session at 37,945 down by 226.25 points i.e. 0.59%. BSE Realty index fell by 3.02% and was the top loser among sectoral indices. IT stocks also underperformed broader markets.  BSE Small-cap index ended at 27,814.98 down by 0.62% in comparison to yesterday's closing.   

Keep a close eye on these trending small-cap stocks for tomorrow.   

Tata Teleservices (Maharashtra) - The company has recently announced the launch of ‘EZ Cloud Connect’, an easy, swift and cost-effective secured point to point (P2P) cloud connectivity gateway. EZ Cloud Connect enables enterprises to bypass the internet and deliver data to and from the cloud service provider (CSP) by establishing a dedicated private network connection. EZ Cloud Connect provides improved and consistent network experience with greater bandwidth throughput while reducing capital and operational expenses. The company’s state of the art high-capacity network access is now extended to all major cloud service providers at multiple locations across the country making it convenient for enterprises to opt for EZ Cloud Connect.  

Sharika Enterprises – The company has received an order from TP Western Odisha Distribution Limited for supply, installation, testing and commissioning of 11 KV pole mounted auto recloser and sectionalizer amounting to Rs 67.73 lakh (including taxes).  

DJ Mediaprint and Logistics – The company has said in a filing with the exchange that they have successfully empaneled with UC Divisional Office, Machilipatnam, Andhra Pradesh for the years 2021-2024 for various printing services.  

52-week High Stocks - The following stocks have made fresh 52-week high today – Proseed India, JITF Infralogistics, BPL, Brightcom Group, Manali Petrochemicals, Anant Raj and Navneet Education. Keep a close eye on these counters on Wednesday, September 29, 2021.

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Top swing trading ideas you should not miss!

swing trading ideas
by 5paisa Research Team 28/09/2021

The deadly combination of price and volume percentage surge helps us to discover high probability swing-trading candidates.   

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:    

  1. Sun Pharmaceutical Industries: Sun Pharmaceutical was the top-performing stock in the Nifty Pharma index. The stock gained nearly Rs 35 from the day’s low and what is more outstanding is the move from the lower levels of the day was backed by a massive surge in the volume, which indicates the enthusiasm of the buyers. Moreover, the volume for the day was greater than the 10 and 30-days average volume, which resulted in meeting the norms of the swing trading system. The stock has the potential to touch an all-time high of Rs 804 and beyond in the near term with immediate support placed at Rs 777.    

  1. Bharat Heavy Electricals (BHEL): The stock of BHEL has soared nearly 7% on Tuesday and with this, the stock recorded its highest single day gain in the near term. Moreover, the stocks' daily range on Tuesday was greater than its 10-days average range. Additionally, the stock witnessed volume over 11.73-crore shares which is greater than its 10 and 30-days average volume, so it meets the rules of our defined swing trading system. The stock has support placed around Rs 58.50, while on the upside the resistance is seen around the zone of Rs 64-65.     

  1. IDBI Bank: IDBI Bank stock hit a new 52-week high on Tuesday and technically, the stock has witnessed a breakout of the 29-weeks consolidation pattern. Furthermore, the breakout is backed by a surge in the volumes, as volume for the day was higher than the previous day and was higher than 10 and 30-days average volume. Hence, swing traders can keep this stock on their radar and should not miss this stock as it has the potential to touch levels of Rs 48-50 in the near to medium term

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Why Phoenix Mills is set to shrug off Covid-driven slowdown and get back on growth path

28/09/2021

Real estate developer Phoenix Mills Ltd is well placed to tap into growth opportunities as the property market revives and consolidation activity accelerates after the Covid-19 shock, according to a report by IIFL Securities.

The Mumbai-listed developer—like most of its industry peers—had suffered as the lockdowns imposed to control the pandemic last year and earlier this year sapped demand across residential, retail and office segments. However, the sector is coming back on its feet as shopping malls reopen, offices resume and residential sales improve.

IIFL Securities said in its report that 2020-21 and the first half of 2021-22 were “a washout”, but there are high hopes of a recovery. Indeed, the company’s retail revenues contracted 48% in 2020-21, the report noted.

While profitability took a sharp hit due to the waivers offered to tenants, Phoenix Mills focussed on strengthening its balance sheet to tide over any cashflow mismatches during 2021-22 as well as to focus on the next leg of growth. Further, its progress on under-construction malls remains intact and it expects these to come on-stream by 2023-24.

The report said the developer focussed on fortifying its balance sheet through 2020-21, with its core business facing significant headwinds due to Covid-led lockdowns. It added that consumption recovery in coming months would be sharp and that the capital raise of Rs3,000 crore till the first quarter of 2021-22 will help the company take advantage of growth opportunities.

Since the pandemic began, the developer has raised Rs 1,100 crore via an institutional share sale, and formed a joint venture with Singapore sovereign wealth fund GIC for investing Rs 1,100 crore, and sealed a partnership with Canada Pension Plan Investment Board for Rs 800 crore across existing under-construction projects and a Kolkata asset.

As a result, net debt at the end of June 2021 stands at less than Rs 3,000 crore from about Rs 4,000 crore at the end of the fourth quarter of 2019-20 despite operational headwinds.

‘Buy’ call on Phoenix Mills, 24% upside

IIFL Securities reiterated its ‘Buy’ call on Phoenix Mills with a target price of Rs1,060 per share, up 24% from the current market price, for the next one year.

It also said that it expects Phoenix Mills to record 20% annualised growth in earnings over FY20-24,driven by improvement in revenue on the back of rental growth and contribution coming in from completion of under-construction malls in Indore, Ahmedabad and Wakad.

IIFL has built in weak earnings for the current fiscal year, factoring in a 50% waiver in retail rentals, considering that during the first half of the year most malls in Maharashtra remained shut.

The report also said that recovery trends are encouraging and that it expects reversion to the strong trajectory soon.

Already, consumption has recorded a swift recovery after lockdowns opened. This is evident from the trend as consumption reached almost 93% of July 2019 levels – adjusted for non-operating categories –at operational malls in July 2021. Footfalls and four-wheeler traffic reached 83% and 93% of last year’s level, respectively, in January-March 2021, the IIFL report said.

The company operationalized its Lucknow mall and acquired a Kolkata asset during 2020-21. It also aims to double its retail portfolio to about 13 million sq ft by 2025-26 and add about 1 million square feet of retail space annually.

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5 Stocks to Buy Today: September 29, 2021

5 Stocks to Buy
by 5paisa Research Team 28/09/2021

Every morning our analysts scan through the markets universe and chose the best momentum stocks to buy today. The stocks are recommended from a wider list of momentum stocks and only the best ones make it to the top 5 list. We also update on the performance of earlier recommendation every morning to help you with your trading journey. Read on to know the momentum stocks to buy today. The average holding period could be between 7-10 days on average.

List of 5 Stocks to Buy Today

1. Finolex Industries (FINPIPE)

Finolex Industries Stock Details for Today

- Current Market Price: Rs.209

- Stop Loss: Rs. 203

- Target 1: Rs. 215

- Target 2: Rs. 222

- Holding Period: One week

5paisa Recommendation: Our technical experts see a strong volume in the stock hence making this stock best stock to buy.

 

2. Hindustan Petroleum (HINDPETRO)

Hindustan Petroleum Stock Details for Today: 

- Current Market Price: Rs. 292

- Stop Loss: Rs. 286

- Target 1: Rs. 299

- Target 2: Rs. 307

- Holding Period: 1 week

5paisa Recommendation: Our technical analysts observe positive chart structure, thus recommending this stock as the best stock to buy today. 

 

3. Computer Age (CAMS)

Computer Age Stock Details for Today: 

- Current Market Price: Rs. 3,455

- Stop Loss: Rs. 3,397

- Target 1: Rs.3,510

- Target 2: Rs. 3,575

- Holding Period: 1 week

5paisa Recommendation: Our technical experts expects further buying in the stock and recommends buying this stock.

 

4. Jm Chemicals (JBCHEPHARM)

Jm Chemicals Stock Details for Today: 

- Current Market Price: Rs. 1,957

- Stop Loss: Rs. 1,910

- Target 1: Rs. 2,000

- Target 2: Rs. 2,062

- Holding Period: 1 week

5paisa Recommendation: momentum in stock is expected and thus making this stock as one of the best stocks to buy today.

 

5. Hatsun Agro (HATSUN)

Indo Count Stock Details for Today: 

- Current Market Price: Rs. 1,439

- Stop Loss: Rs. 1,405

- Target 1: Rs. 1,466

- Target 1: Rs. 1,521

- Holding Period: 1 week

5paisa Recommendation: Our technical experts see end in sideways move of the stock hence making this stock best stock to buy.

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BTST Trading Tips for Today: 29th September, 2021

BTST Trading Tips for Today: 28th September, 2021
by 5paisa Research Team 28/09/2021

5paisa analysts bring the best intraday ideas, short-term ideas and long-term ideas for you. In the morning we provide best momentum stocks to buy today, while in the last trading hour we provide Buy Today Sell Tomorrow (BTST) and Sell Today Buy Tomorrow (STBT) ideas.

BTST Trading Ideas for Today

1. BTST : PIDILITIND SEP FUT

- Current Market Price: Rs.2,415

- Stop Loss: Rs.2,392

- Target 1: Rs.2,445

- Target 2: Rs 2,472

2. BTST : SBIN SEP FUT

- Current Market Price: Rs.458

- Stop Loss: Rs.454

- Target 1: Rs.464

- Target 2: Rs 469

 

3. BTST : IGL SEP FUT

- Current Market Price: Rs.519

- Stop Loss: Rs.515

- Target: Rs.528

 

4. BTST : APLLTD

- Current Market Price: Rs.792

- Stop Loss: Rs.786

- Target 1: Rs.799

- Target 2: Rs.806

 

5. BTST : MGL

- Current Market Price: Rs.1,078

- Stop Loss: Rs.1,067

- Target 1: Rs.1,095

- Target 2: Rs 1,110