Gland Pharma(BSE Code 543245)

A high networth investor (HNI) who is accumulating Gland Pharma stocks for quite some time is bullish on the stock as the company has cocked a snook at outlook estimates and valuations. The company has put up an excellent show for Q1 of fiscal 2022 with double-digit growth in sales as well as earnings. With the sales turnover expanding by 30.5 per cent – as compared to the corresponding quarter last year — at Rs 1,153.9 crore, the profit at net level inched up 12 per cent yoy to Rs 350 crore – much ahead of the estimates placed by analysts. Besides doing very well in the domestic market, the company put up a robust performance on the export front. What is more, the growth outlook for the company’s business across geographies is considered robust. Backed by increasing geographic expansion and new partnerships, rest-of-the-world business is expected to sustain strong growth momentum.

Prospects for the company are all the more promising as the vaccine manufacturing arrangement for Sputnik V is progressing as per schedule and the company hopes to commence production from November 2021.

The company has also entered into another arrangement for a Covid vaccine with an Indian company and aims to start operations by October 2021.

(CMP Rs 4050.45, 52 week H/L Rs 4180/1701, BV Rs 359.40, FV Re 01)

---

SAIL Ltd.(BSE Code 500113)

Leading investors and traders in Indian stock markets are reported to have started buying SAIL stocks in a big way. Ace investor and big bull trader Rakesh Jhunjhunwala is reported to have bought 57.5 million stocks, equivalent to 1.39 per cent. What is more, another leading investor and now promoter of a fast growing FMCG company is reported to have bought 7.5 million SAIL shares, while Madhukar Sheth, a hidden jewel among investors and operators in the Indian stock market, is said to have bought 5 million shares.

All these purchases are said to have taken place in the first quarter of fiscal year 2022.

Heavy buying in SAIL stocks follows an unprecedented boom in the steel sector, with steel prices almost doubling on widespread demand at home as well as abroad. SAIL is one of the largest steel manufacturing companies in the country, producing iron and steel at five integrated plants and three special steel plants. It also manufactures a broad range of steel products.

The steel sector is booming as demand for steel is fast going up in the midst of a growing demand-supply gap. In the beginning of the pandemic era, demand for steel was at the lowest level. But riding on the back of various stimulus packages there arose a sharp rebound in global demand, significantly widening the demand-supply gap and pushing up steel prices in the process. At the same time, with China, an erstwhile leading exporter of steel turning importer, the demand for and prices of steel have shot up all the more. Experts believe the domestic demand for Indian steel is expected to grow at a CAGR of about 7.5 per cent during the next 2 to 3 years. At the same time, demand for Indian steel in overseas markets is also going up steadily.

While the demand for flat products in the domestic market is likely to be supported by the pipe manufacturing, roofing and automotive sectors, the demand for long products will continue to increase largely on the back of fast-growing infrastructure spend.

As a result, going ahead, SAIL’s performance is likely to improve significantly and shares of the company are still available at attractive levels.

(CMP Rs 143.05, 52 week H/L Rs 152/32, BV Rs 109.90, FV Rs 10)

---

ICICI Bank(BSE Code 532174)

Research analysts tracking the finance and banking sector are almost unanimous that ICICI Bank is emerging as the topmost private sector bank in the country, replacing HDFC Bank which is passing through a tough period. Investors in general and HNIs in particular have started including this stock into their portfolio. The company’s prospects have started improving rapidly and it has started the new fiscal year 2022 on a buoyant note with a hefty 77.6 per cent spurt in net profit to Rs 4,616 crore – as compared to Rs 2,699.2 crore in the corresponding quarter a year ago.

The bank’s performance is heartwarming, with its net interest income (NII) growing 17.8 per cent at Rs 10,935.7 crore and the net interest margin (NIM) shooting up to a 26- quarter high at 3.89 per cent, as compared to 3.84 per cent achieved in the same quarter a year ago.

There is no bad news on the front of quality of assets, with the gross NPA standing at 5.2 per cent against the previous 5 per cent and the net NPA working out to 1.2 per cent against the previous 1.1 per cent.

Global brokerages have turned distinctly bullish on the stock. Nomura, while recommending ‘buy’ for the scrip, has set the price target at Rs 780, while Morgan Stanley has raised the target to Rs 900. Maintaining that the bank is now consistently delivering sector-best growth in its August 15, 2021 Corporate India 17 banking business, CLSA adds, “We have raised the price target to Rs 940.”

(CMP Rs. 702.10, 52 week H/L Rs. 718/334, BV Rs. 230.20, FV Rs 02)

---

Hindustan Zinc(BSE Code 500188)

A mutual fund has started accumulating Hindustan Zinc stocks. The research analysts of the fund are bullish over the company, which is the second largest manufacturer of zinc and lead miner globally with 10 million tons of ore production capacity. Demand for zinc is on the rise all over the world and the quality of the metal produced at the Aguina mine of Hindustan Zinc located at Rampur is rated very high. The company can easily sell its metal at a relatively high price. This is well reflected in the continued improvement in the company’s financial performance.

With growing demand for zinc at home as well as abroad, the company has started growing from strength to strength.

During the last five years, the sales turnover has expanded from Rs 18,798 crore in fiscal 2017 to Rs 22,629 crore in fiscal 2021, with the operating profit inching up from Rs 9,738 crore to Rs 11,672 crore during this period. The company’s financial position is very strong, with reserves at the end of March 2021 standing at Rs 31,468 crore – over 37 times its equity capital of Rs 845 crore. This is virtually a debt-free corporate entity with interest burden last year just around 1.7 per cent of its sales. In fiscal 2021, it paid interest of Rs 386 crore out of its operating profit of Rs 11,672 crore. Of course, during the last one year, the share price has moved up from Rs 197 to Rs 321 but even this price is very attractive according to many analysts.

(CMP Rs 319.45, 52 week H/L Rs 363/197, BV Rs 76.50, FV Rs 02)

---

Jindal Steel and Power (BSE Code 532286)

Research analysts tracking the metals sector are now extremely bullish on Jindal Steel and Power (JSPL), which has staged a remarkable turnaround – from a loss-making steel, power and mining company to a growth-oriented corporate entity with strong financials emerging as blue chip steel company. An industrial power house today with a dominant presence in steel, power, mining and infrastructure, led by debonair Naveen Jindal, JSPL’s enviable transformation and success story has been scripted by its resolve to innovate, set new standards, enhance capabilities and ensure that it stays true to its cherished value system.

The renewed bullish fervour in commodities the world over has changed the prospects for the company, which has started going from strength to strength. During the last five years, the company’s sales turnover has zoomed from Rs 13,848 crore in fiscal 2017 to Rs 33,308 crore in fiscal 2021, with the profit at net level skyrocketing to Rs 7154.31 crore in striking contrast to a loss of Rs 986.45 crore in fiscal 2017. The company is now on the growth path and has highly ambitious growth plans entailing investments exceeding $ 30 billion, and has several business initiatives running simultaneously across continents.

The company has announced an investment of over Rs 1 lakh crore in Odisha. The company will expand its 6 mtpa integrated steel plant to a 25.2 mtpa plant, which will make the Angul plant the largest single-location steel plant capacity in the world. The company also proposes to set up an integrated giant steel plant involving a capital expenditure outlay of Rs 7,500 crore. For this project, proposed to be set up in Nellore district, the Andhra government has allotted 860 acres of land at Thamminapatnam and Momidi villages in Nellore distrct.

(CMP Rs 425.75, 52 week H/L Rs 502/159, BV Rs 311.90, FV Re 01)

---

Coforge(BSE Code 532541)

A knowledgeable HNI (high networth Investor) has started accumulating Coforge, a mid-cap, IT company formerly known as NIIT Technologies. The company has been continuously increasing its deal wins and has been ramping up acquisitions to boost its capabilities in the BPM and digital solution space. With the tech cycle in place, quality players like Coforge stand to continue delivering impressive returns to shareholders over the long term.

Needless to say, the company has been steadily growing yoy. During the last five years, its sales turnover has expanded from Rs 1,596 crore in fiscal 2017 to Rs 2,412 crore in fiscal 2021, with net profit moving up from Rs 165 crore to Rs 240 crore during this period. The company’s financial position is very strong, with reserves at the end of March 2021 standing at Rs 1,692 crore as against an equity capital of Rs 60.50 crore. The company is a debt-free entity and its interest provision last year was just around Rs 14 crore against its sales turnover of Rs 4,663 crore and operating profit of Rs 781 crore.

The company has started the new fiscal 2022 on a buoyant note with consolidated net profit during Q1FY22 (April to June 2021) shooting up 55 per cent – from Rs 79.9 in the same quarter a year ago to Rs 123.6 crore. The management is looking at an organic growth of at least 19 per cent in constant currency terms during fiscal 2022. With a robust order book of $ 645 million suggesting an expansion of 38.7 per cent, net head count addition (with total employees reaching 20,491) and large deal size that have staged a new record, the company is primed to deliver robust, predictable and profitable growth going ahead.

(CMP Rs 4766.20, 52 week H/L Rs 5225/1880, BV Rs 407.00, FV Rs 10)

---