India Grid Trust (BSE Code 540565)

An investment banker is bullish on India Grid Trust, an infrastructure investment trust. The company which had put up a listless performance last year (with profit declining fractionally from Rs. 210 crore in the fiscal 2018 to Rs. 200 crore in the fiscal 2019), is heading for better days, with rising internal rate of return, a noticeable increase in liquidity and acquisition of Rs. 6500 crore AUM of framework asset during the next 24 months proving to be game changers. The recent equity raise of Rs. 2500 crore has improved liquidity and enhanced growth prospects. What is more, KKR coming on board as additional sponsor will give a big boost to the company’s business ahead. Revenues of the company which had amounted to Rs. 666 crore in the fiscal 2019 are expected to reach Rs. 2000-crore mark within the next 3 years or so with the profit shooting up from Rs. 199.6 crore to cross Rs. 500-crore mark.

(CMP Rs. 93.95, 52 week H/L Rs. 95/81, BV Rs. 98.20, FV Rs. 100)

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Inox Leisure (BSE Code 532706)

A research analyst working with a FII (foreign institutional investor) is bullish on Inox Leisure, one of the largest multiplex chains with 143 multiplexes and 595 screens in 67 cities. The company has been doing quite well on the financial front. Of course, during the Q1 the net profit has declined to Rs. 27 crore as compared to Rs. 36 crore in the corresponding quarter last year on account of overall economic slowdown affecting advertisement revenue. However, there is no drop in footfalls and overall revenues have amounted to Rs. 493 crore as compared to Rs. 415 crore, showing a rise of around 19 crore.

Interestingly, the company will be one of the largest beneficiaries, the cut in corporate tax rates as it is operating in the highest tax bracket. Little wonder, the prospects for the current as well as the next year are quite encouraging.

(CMP Rs. 333.90, 52 week H/L Rs. 382.60/200, BV Rs. 93.70, FV Rs. 10)

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KEC International (BSE Code 532714)

Five research analysts working with different brokerage houses have strongly recommended KEC International, a RPG group company, which has emerged as a leading engineering, procurement and construction (EPC) companies in the power transmission space. The company has a strong order book amounting to Rs. 19,000 crore and prospects ahead are all the more encouraging. Though there is surplus power generating capacity installed in the country, there is severe shortage of power in certain areas on account of shortfall in the transmission and distribution system. In order to fill up this gap, the government has decided to step up capital expenditure on T & D projects. This augurs well for companies like KEC. In addition to domestic opportunities, the company has a strong international with overseas orders accounting for around 51 per cent of the pending orders worth Rs. 19,000 crore. The company is doing quite well in countries like the USA, Thailand, Malaysia, Bangladesh, Nepal and Afghanistan.

The company has successfully entered into the railway segment also. Recently, it has won orders worth Rs. 580 crore in the RR Civil Work of Rs. 265 crore in metro sectors. This segment has very good opportunities for the company going ahead.

During the next five years, revenues of the company are expected to shoot up from Rs. 11,000 crore in the fiscal 2019 to reach Rs. 20,000-crore level and the profit at net level is likely to touch Rs. 1000-crore mark.

(CMP Rs. 282.25, 52 week H/L Rs. 340.50/230, BV Rs. 97.00, FV Rs. 02)

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Asian Paints (BSE Code 500820)

Though a global research firm Morgan Stanley has downgraded Asian Paints, a septuagarian stock broker, based in Mumbai believes that this should be interpreted that these shares should not be purchased at the current price levels at this juncture. Afterall, overall economic slowdown will not give a big boost to the company’s financial performance. But investors should be ready to seize the opportunity to pick up these shares at every decline. Afterall, this Indian multinational paints company has a colourful past and will also have a colourful future as it is fundamentally strong and no foreign giant has been able to overpower it all these years. How many companies have given over 7000 per cent return in a period of less than two decades? Despite economic slowdown, the company is doing well. After recording a rise in sales from Rs. 11,649 crore in the fiscal 2015 to Rs. 16,392 crore in the fiscal 2019, it has grossed a sales turnover of Rs. 4380 crore in the Q1 fiscal year 2020 as compared to Rs. 3706 crore in the same quarter a year ago. And the net profit after advancing from Rs. 1327 crore to Rs. 2135 crore during the last five years has amounted to Rs. 652 crore in the Q1 this fiscal year as compared to Rs. 542 crore so best thing is to accumulate these shares at every decline. ‘This is a right scrip for any discernible investor but one should buy at the right price,’ he quips.

(CMP Rs. 1794.45, 52 week H/L Rs. 1819.55/1120, BV Rs. 92.70, FV Re. 01)

Sobha Ltd. (BSE Code 532784)

Though the real estate market is passing through a difficult phase, a research analyst working with a leading broking house advises to go for Sobha Ltd. with a long term perspective. According to him a discernible investor should not be worried over the intermittent drop in stock prices. On the other hand, such a correction should be considered an opportunity to accumulate.

According to him, though the Q2 FY2020 has been almost flat for the company, its fundamentals are very strong. During the last month, the company has announced that sales of around a million sq.ft. have already taken place. The management is highly hopeful about the second half of the year.

What is more having established its name in Bangaluru, and Chennai, the company is now foraying in Delhi and Hyderabad residential markets. At the same time, known for its luxury apartments, the company will increase its focus on the mid-incomes apartments. It expects its housing business in the Rs. 50 lakh to Rs. one crore segment to grow significantly.

(CMP Rs. 439.00, 52 week H/L Rs. 587.95/405, BV Rs. 219.00, FV Rs. 10)

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Torrent Pharmaceuticals (BSE Code 500420)

A medical practioner-turned research analyst and tracking mainly pharma sector recommends don't hurry in buying Torrent Pharma. It will be better to wait and see. "His advice follows the warning letter issued by the US FDA to the company's Indrad (Gujarat) plant, which is engaged in the manufacture of API (Active Pharmaceutical Ingredients) and formulations. Indrad is a very important plant for Torrent as it contributes about 80 per cent to the US sales. If the company does not get the clearance soon, this may adversely affect the company's sales particularly in the USA. As of today, as many as 34 products of the company are pending for approvals. This approval may not be coming till the Indrad plant issue is resolved.

Of course, the company is doing well. During the last five years, the sales turnover has shot up from Rs. 3476 crore in the fiscal 2015 to Rs. 5762 crore in the fiscal 2019 with the net profit inching up from Rs. 623 crore to Rs. 745 crore. Even the current year has started with a buoyant note with sales amounting to Rs. 1603 crore in Q1 as compared to Rs. 1452 crore in the corresponding quarter last year and the profit at net level almost doubling to Rs. 223 crore from Rs. 122 crore. However, if the USFDA issue is not resolved immediately, it will adversely impact the pace of growth of the company.

(CMP Rs. 1699.45, 52 week H/L Rs. 1964/1453, BV Rs. 437.20, FV Rs. 05)

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IndusInd Bank (BSE Code 532187)

A research analyst tracking banking sector among others has cautioned investors not to take their investment decision in IndusInd Bank on the strength of its current performance as huge NPAs continue to impact the final picture. The bank has put up a gratifying show for the Q2 fiscal year 2020 with net interest income (NII) shooting up 43.4 per cent to Rs. 4161 crore (after inclusion of Bharat Financial microfinance business) with the profit at net level taking a high jump to Rs. 1383 crore as compared to Rs. 920 crore in the corresponding quarter last year. Slippages, however, exert pressure on the bank's balance sheet. After an NPA of 2.15 per cent in the Q1 FY 2020 (April to June), the bank has reported an NPA of 2.19 per cent during the Q2. No doubt, long term prospects for the bank are quite promising. The renewed focus on micro lending and SMEs especially in the southern region will fuel the next stage of growth for the bank. In due course, net interest margin (NIM) is expected to improve to over 4.5 per cent on back of lower wholesale deposit rates and high share of fixed rate loan book. However, with asset quality spoiling in the Q2 performance, investors should wait and watch the asset quality front during the next 2-3 quarters before taking an investment decision. The best strategy will be to accumulate at every decline.

(CMP Rs. 1250.50, 52 week H/L Rs. 1835/1192, BV Rs. 437.20, FV Rs. 10)

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Marico (BSE Code 531642)

An investment manager of a bank feels that even a strong consumer product company like Marico has started facing headwinds at home as well as abroad on account of the economic slowdown. The company, which has been doing very well all these years may now face a slowdown in the pace of growth. During the last five years the company has made rapid strides with sales turnover advancing from Rs. 4681 crore in the fiscal 2015 to Rs. 6971 crore in the fiscal 2019 and the net profit has more than doubled from Rs. 545 crore to Rs. 1132 crore during this period. But in the Q1 FY 2020, the pace of growth has slackened with sales amounting to Rs. 1777 crore (Rs. 1685 crore) and the net profit working out at Rs. 251 crore (Rs. 215 crore).

In order to fight the recessionary trends in the FMCG sector, the company has started focusing on categories like male grooming, serums, hair nourishment and foods which has better prospects ahead. Once the economy start reviving, the company's growth pace will quicken as it is fundamentally strong and has popular products. Discernible investors should go slow and start accumulating these stocks in small quantities at every decline.

(CMP Rs. 385.20, 52 week H/L Rs. 403.70/296, BV Rs. 27.20, FV Re. 01)