Occasional hedging by buying options or shorting index futures.
Investment rationale on every idea is provided.
10% in a particular Stock and 30% (max) in a Sector.
Cash holding based on market direction call. Cash to be deployed in case of sharp market fall.
Cash holding to earn notional interest income of 4% p.a.
STOCKS RATIONALE
NBCC CMP 53 TGT 77
NBCC is a big beneficiary of Infrastructure and housing for all (affordable housing) thrust by government in concurrence with improving rural and semi-urban economy.
Its standing order book has swollen above INR 80,000 crore at an healthy annual run rate. For FY19 so far it has received INR 6,000 crore, worth of orders.
In FY18 it registered a top line of around INR 7100 crore, net profit of INR 372 crore & cash profit of around INR 550 crore. Book to bill ratio stands at 11.5x and order book to sales at 8.5x which gives revenue visibility for next 10 years at constant top line based on FY18.
It is insulated largely from rising input costs as primary business is Project Management Consultancy (PMC) driven by asset light business model. PMC contributes around 90% to top line & almost 100% to bottom after covering costs of other business forays.
It has recently forayed into Real Estate with an eye on affordable housing, housing re-development projects and building of new townships.
Strong financials and steady cash flow is an added advantage. Cash per share in books as of FY18 stands at Rs. 13.75. Topline CAGR stands at 15% and PAT at 10% for last five years.
We expect execution to pick up steam on existing order book, delivering earnings CAGR of over 20% in next two years; which translates into an EPS of Rs.3.88 for FY20e. The stock is currently trading at a PER of 13.66x based on EPS estimate for FY20e.
Rock solid debt free balance sheet, proven execution capability, return ratios in high teens, makes it a compelling buy in light of steep stock price correction.
Valuing the company at a PER of 20x based on FY20e, per share price comes at INR 77.60, leaving a scope of 45% potential upside from current levels. We recommend accumulating NBCC.
About the Company: NBCC is into Project Management Consultancy (PMC), Engineering Procurement & Construction (EPC) and Real Estate (RE). PMC being is chief revenue contributor. Company's PMC business segment includes management and consultancy services for a range of Civil Construction Projects including Residential and Commercial Complexes, Re-development of Colonies, Hospitals, Educational Institutions, Infrastructure Works for Security Personnel, Border Fencing as well as Infrastructure Projects such as Roads, Water Supply Systems, Storm Water Drainage Systems, Water Storage Solutions and Solid Waste Management Schemes at different towns all over India. Majorly orders comes from various ministries of Central & State Governments. Some of the mega projects done by NBCC are World Trade Centre at New Delhi and International Exhibition-cumConvention Centre at Pragati Maidan.
Disclaimer: This document is STRICTLY for authorised recipients only and is prepared for information purposes only. The information provided herein, we believe, is from reliable sources. IndiaNivesh is not liable for the accuracy of the source data as well as the results of the calculations based on the same. We do not claim that the data provided herein is accurate and complete in all respects. This is not an offer or solicitation of any offer to buy or sell securities. No action is intended to be taken by the recipients based on this document. The recipients may take their decisions based on their own judgement and independent advice that they may receive before making any investment or disinvestment decisions. The recipients are advised not to take any decision only on the basis of this document. No portion of this document should be printed, reprinted, redistributed, reproduced, duplicated or sold.
Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. The third party research material included in this document does not represent the views of INSL and/or its officers, employees and the recipient must exercise independent judgement with regard to such content. This document has been published in accordance with the provisions of Regulation 18 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is not to be altered, transmitted, reproduced, copied, redistributed, uploaded or published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from INSL. This document is solely for information purpose and should not to be construed as an offer to sell or the solicitation of an offer to buy any security. Recipients of this document should be aware that past performance is not necessarily a guide for future performance and price and value of investments can go up or down. The suitability or otherwise of any investments will depend upon the recipients particular circumstances. INSL does not take responsibility thereof. The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is based on technical and derivative analysis center on studying charts of a stock’s price movement, outstanding positions and trading volume, as opposed to focusing on a company’s fundamentals and, as such, may not match with a report on a company’s fundamentals. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances, statements and opinion given, made available or expressed herein or for any omission or for any liability arising from the use of this document. Opinions expressed are our current opinions as of the date appearing on this document only. The opinions are subject to change without any notice. INSL directors/employees and its clients may have holdings in the stocks mentioned in the document. This report is based / focused on fundamentals of the Company and forward-looking statements as such, may not match with a report on a company’s technical analysis report Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Dharmesh Kant Following table contains the disclosure of interest in order to adhere to utmost transparency in the matter:
INSL, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. This information is subject to change, as per applicable law, without any prior notice. INSL reserves the right to make modifications and alternations to this statement, as may be required, from time to time. Research Analyst has not served as an officer, director or employee of Subject Company One year Price history of the daily closing price of the securities covered in this note is available at www.nseindia.com and www.economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose name of company in the list browse companies and select 1 year in icon YTD in the price chart)
Posted by Mehul Kothari | Published on 03-DEC-2019
Investment Norms: INR 10 Lakhs (Model Corpus)
Maximum Stocks Open: 10
Target Investment Horizon: 6 Months
Occasional hedging by buying options or shorting index futures.
Investment rationale on every idea is provided.
10% in a particular Stock and 30% (max) in a Sector.
Cash holding based on market direction call. Cash to be deployed in case of sharp market fall.
Cash holding to earn notional interest income of 4% p.a.
RBL BANKCMP 500 TGT 690
Recent correction is an opportunity to accumulate quality stocks like RBL Bank.
RBI’s pause in hiking interest rates on pretext of benign inflation augurs well for upcoming banks like RBL.
RBL has been on a robust growth trajectory consistently maintaining growth in advances & profit in excess of 30%.
Healthy deposit to advances ratio was a key enabler in improving NIM to 4.04% in Q1FY19 up from 3.54% in Q1FY18.
Management has demonstrated consistent improvement in operational efficiency and cost to income ratio while embarking on a high growth trajectory through capturing quality business.
Sound asset quality which improved in Q1FY19 having GNPA at 1.40% (1.46% in Q1FY18) and net NPA at 0.75% (0.81% in Q1FY18). Going forward we expect RBL’s asset quality to remain firm.
Strong and improving financials amidst scenario of rising competition & higher cost of funds sets it apart from most of its peers. It reported ROA at 1.26% and ROE of 11.16% in Q1FY19 having provision coverage ratio of 60.41% (57.99% in Q1FY18) while registering decline in both Gross and Net NPA.
It has well diversified business mix and has been increasing geographical footprint steadily. Given, its present size and aggression of management it has long way to go before its high growth trajectory tapers off.
The book value has compounded in excess of 27% for last three years. In a rising cost of funds scenario and challenged macro environment this bank becomes a strong candidate for re-rating on back of its robust performance.
On a conservative basis, we expect 20% CAGR on book value for next couple of years, which for FY20e is likely to be Rs. 230, valuing it at 3.0x P/BV (FY20e) per shares target price comes at Rs. 691, leaving a scope of 39% upside from current levels.
About the Company: RBL Bank is one of India’s fastest growing private sector banks with an expanding presence across the country. The Bank offers specialized services under six business verticals namely: Corporate & Institutional Banking, Commercial Banking, Branch & Business Banking, Retail Assets, Development Banking and Financial Inclusion, Treasury and Financial Markets Operations. It currently services over 4.9 million customers.
Disclaimer: This document is STRICTLY for authorised recipients only and is prepared for information purposes only. The information provided herein, we believe, is from reliable sources. IndiaNivesh is not liable for the accuracy of the source data as well as the results of the calculations based on the same. We do not claim that the data provided herein is accurate and complete in all respects. This is not an offer or solicitation of any offer to buy or sell securities. No action is intended to be taken by the recipients based on this document. The recipients may take their decisions based on their own judgement and independent advice that they may receive before making any investment or disinvestment decisions. The recipients are advised not to take any decision only on the basis of this document. No portion of this document should be printed, reprinted, redistributed, reproduced, duplicated or sold.
Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. The third party research material included in this document does not represent the views of INSL and/or its officers, employees and the recipient must exercise independent judgement with regard to such content. This document has been published in accordance with the provisions of Regulation 18 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is not to be altered, transmitted, reproduced, copied, redistributed, uploaded or published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from INSL. This document is solely for information purpose and should not to be construed as an offer to sell or the solicitation of an offer to buy any security. Recipients of this document should be aware that past performance is not necessarily a guide for future performance and price and value of investments can go up or down. The suitability or otherwise of any investments will depend upon the recipients particular circumstances. INSL does not take responsibility thereof. The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is based on technical and derivative analysis center on studying charts of a stock’s price movement, outstanding positions and trading volume, as opposed to focusing on a company’s fundamentals and, as such, may not match with a report on a company’s fundamentals. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances, statements and opinion given, made available or expressed herein or for any omission or for any liability arising from the use of this document. Opinions expressed are our current opinions as of the date appearing on this document only. The opinions are subject to change without any notice. INSL directors/employees and its clients may have holdings in the stocks mentioned in the document.This report is based / focused on fundamentals of the Company and forward-looking statements as such, may not match with a report on a company’s technical analysis reportEach of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Dharmesh KantFollowing table contains the disclosure of interest in order to adhere to utmost transparency in the matter:
INSL, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. This information is subject to change, as per applicable law, without any prior notice. INSL reserves the right to make modifications and alternations to this statement, as may be required, from time to time.Research Analyst has not served as an officer, director or employee of Subject CompanyOne year Price history of the daily closing price of the securities covered in this note is available at www.nseindia.com and www.economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose name of company in the list browse companies and select 1 year in icon YTD in the price chart))
Posted by Mehul Kothari | Published on 08-JAN-2020
Board of Directors of NIIT Technologies Limited at their meeting have approved the buy-back of up to 19,56,290 fully paid equity shares of a face value of Rs. 10/- each at a price of up to INR 1,725 per share aggregating up to INR 337 Crore.Takeaway:
As per shareholding data available in FY 2018-19 annual report shareholders holding less than 500 shares are 2.27 Cr. which is 36.5% of the paid up capital. Assuming 1/3 of this is retail shareholding minimum acceptance ratio comes around 3.86% for retail shareholders*. It may go higher depending upon participation of other shareholders in the buyback.Promoters of the company have expressed their intent to participate in the buyback, which makes risk reward ratio unattractive for retail participation in buyback.*Retail shareholders are classified as the one’s who hold shares of market value upto 2 lakhs on the record date.Other Information about the Buyback•The Entire procedure might take approximate 3 months.
•Record date for the buyback is yet to be announced by the companyDisclaimer: "Investment in securities market and Mutual Funds are subject to market risks, read all the related documents carefully before investing.")
NBCC – Nivesh Velocity Portfolio
Investment Norms: INR 10 Lakhs (Model Corpus)
STOCKS RATIONALE
NBCC
CMP 53 TGT 77
Disclaimer: This document is STRICTLY for authorised recipients only and is prepared for information purposes only. The information provided herein, we believe, is from reliable sources. IndiaNivesh is not liable for the accuracy of the source data as well as the results of the calculations based on the same. We do not claim that the data provided herein is accurate and complete in all respects. This is not an offer or solicitation of any offer to buy or sell securities. No action is intended to be taken by the recipients based on this document. The recipients may take their decisions based on their own judgement and independent advice that they may receive before making any investment or disinvestment decisions. The recipients are advised not to take any decision only on the basis of this document. No portion of this document should be printed, reprinted, redistributed, reproduced, duplicated or sold.
Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. The third party research material included in this document does not represent the views of INSL and/or its officers, employees and the recipient must exercise independent judgement with regard to such content. This document has been published in accordance with the provisions of Regulation 18 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is not to be altered, transmitted, reproduced, copied, redistributed, uploaded or published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from INSL. This document is solely for information purpose and should not to be construed as an offer to sell or the solicitation of an offer to buy any security. Recipients of this document should be aware that past performance is not necessarily a guide for future performance and price and value of investments can go up or down. The suitability or otherwise of any investments will depend upon the recipients particular circumstances. INSL does not take responsibility thereof. The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is based on technical and derivative analysis center on studying charts of a stock’s price movement, outstanding positions and trading volume, as opposed to focusing on a company’s fundamentals and, as such, may not match with a report on a company’s fundamentals. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances, statements and opinion given, made available or expressed herein or for any omission or for any liability arising from the use of this document. Opinions expressed are our current opinions as of the date appearing on this document only. The opinions are subject to change without any notice. INSL directors/employees and its clients may have holdings in the stocks mentioned in the document.
This report is based / focused on fundamentals of the Company and forward-looking statements as such, may not match with a report on a company’s technical analysis report
Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Dharmesh Kant
Following table contains the disclosure of interest in order to adhere to utmost transparency in the matter:
INSL, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. This information is subject to change, as per applicable law, without any prior notice. INSL reserves the right to make modifications and alternations to this statement, as may be required, from time to time.
Research Analyst has not served as an officer, director or employee of Subject Company
One year Price history of the daily closing price of the securities covered in this note is available at www.nseindia.com and www.economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose name of company in the list browse companies and select 1 year in icon YTD in the price chart)
Previous Story
RBL Bank – Nivesh Velocity Portfolio
Investment Norms: INR 10 Lakhs (Model Corpus) Maximum Stocks Open: 10 Target Investment Horizon: 6 Months Occasional hedging by buying options or shorting index futures. Investment rationale on every idea is provided. 10% in a particular Stock and 30% (max) in a Sector. Cash holding based on market direction call. Cash to be deployed in case of sharp market fall. Cash holding to earn notional interest income of 4% p.a. RBL BANKCMP 500 TGT 690 Recent correction is an opportunity to accumulate quality stocks like RBL Bank. RBI’s pause in hiking interest rates on pretext of benign inflation augurs well for upcoming banks like RBL. RBL has been on a robust growth trajectory consistently maintaining growth in advances & profit in excess of 30%. Healthy deposit to advances ratio was a key enabler in improving NIM to 4.04% in Q1FY19 up from 3.54% in Q1FY18. Management has demonstrated consistent improvement in operational efficiency and cost to income ratio while embarking on a high growth trajectory through capturing quality business. Sound asset quality which improved in Q1FY19 having GNPA at 1.40% (1.46% in Q1FY18) and net NPA at 0.75% (0.81% in Q1FY18). Going forward we expect RBL’s asset quality to remain firm. Strong and improving financials amidst scenario of rising competition & higher cost of funds sets it apart from most of its peers. It reported ROA at 1.26% and ROE of 11.16% in Q1FY19 having provision coverage ratio of 60.41% (57.99% in Q1FY18) while registering decline in both Gross and Net NPA. It has well diversified business mix and has been increasing geographical footprint steadily. Given, its present size and aggression of management it has long way to go before its high growth trajectory tapers off. The book value has compounded in excess of 27% for last three years. In a rising cost of funds scenario and challenged macro environment this bank becomes a strong candidate for re-rating on back of its robust performance. On a conservative basis, we expect 20% CAGR on book value for next couple of years, which for FY20e is likely to be Rs. 230, valuing it at 3.0x P/BV (FY20e) per shares target price comes at Rs. 691, leaving a scope of 39% upside from current levels. About the Company: RBL Bank is one of India’s fastest growing private sector banks with an expanding presence across the country. The Bank offers specialized services under six business verticals namely: Corporate & Institutional Banking, Commercial Banking, Branch & Business Banking, Retail Assets, Development Banking and Financial Inclusion, Treasury and Financial Markets Operations. It currently services over 4.9 million customers. Disclaimer: This document is STRICTLY for authorised recipients only and is prepared for information purposes only. The information provided herein, we believe, is from reliable sources. IndiaNivesh is not liable for the accuracy of the source data as well as the results of the calculations based on the same. We do not claim that the data provided herein is accurate and complete in all respects. This is not an offer or solicitation of any offer to buy or sell securities. No action is intended to be taken by the recipients based on this document. The recipients may take their decisions based on their own judgement and independent advice that they may receive before making any investment or disinvestment decisions. The recipients are advised not to take any decision only on the basis of this document. No portion of this document should be printed, reprinted, redistributed, reproduced, duplicated or sold. Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. The third party research material included in this document does not represent the views of INSL and/or its officers, employees and the recipient must exercise independent judgement with regard to such content. This document has been published in accordance with the provisions of Regulation 18 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is not to be altered, transmitted, reproduced, copied, redistributed, uploaded or published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from INSL. This document is solely for information purpose and should not to be construed as an offer to sell or the solicitation of an offer to buy any security. Recipients of this document should be aware that past performance is not necessarily a guide for future performance and price and value of investments can go up or down. The suitability or otherwise of any investments will depend upon the recipients particular circumstances. INSL does not take responsibility thereof. The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. This document is based on technical and derivative analysis center on studying charts of a stock’s price movement, outstanding positions and trading volume, as opposed to focusing on a company’s fundamentals and, as such, may not match with a report on a company’s fundamentals. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances, statements and opinion given, made available or expressed herein or for any omission or for any liability arising from the use of this document. Opinions expressed are our current opinions as of the date appearing on this document only. The opinions are subject to change without any notice. INSL directors/employees and its clients may have holdings in the stocks mentioned in the document.This report is based / focused on fundamentals of the Company and forward-looking statements as such, may not match with a report on a company’s technical analysis reportEach of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Dharmesh KantFollowing table contains the disclosure of interest in order to adhere to utmost transparency in the matter: INSL, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. This information is subject to change, as per applicable law, without any prior notice. INSL reserves the right to make modifications and alternations to this statement, as may be required, from time to time.Research Analyst has not served as an officer, director or employee of Subject CompanyOne year Price history of the daily closing price of the securities covered in this note is available at www.nseindia.com and www.economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose name of company in the list browse companies and select 1 year in icon YTD in the price chart))
Next Story
NIIT Technologies Limited BuyBack Note
Board of Directors of NIIT Technologies Limited at their meeting have approved the buy-back of up to 19,56,290 fully paid equity shares of a face value of Rs. 10/- each at a price of up to INR 1,725 per share aggregating up to INR 337 Crore.Takeaway: As per shareholding data available in FY 2018-19 annual report shareholders holding less than 500 shares are 2.27 Cr. which is 36.5% of the paid up capital. Assuming 1/3 of this is retail shareholding minimum acceptance ratio comes around 3.86% for retail shareholders*. It may go higher depending upon participation of other shareholders in the buyback.Promoters of the company have expressed their intent to participate in the buyback, which makes risk reward ratio unattractive for retail participation in buyback.*Retail shareholders are classified as the one’s who hold shares of market value upto 2 lakhs on the record date.Other Information about the Buyback•The Entire procedure might take approximate 3 months. •Record date for the buyback is yet to be announced by the companyDisclaimer: "Investment in securities market and Mutual Funds are subject to market risks, read all the related documents carefully before investing.")