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Diwali 2022 picks by Stocksbaazigar

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Diwali 2022

Today on the 22nd Sept 2022 Indian stock markets reacted to the 75 bps rate hike by Fed. The hawkish commentary of Jerome Powell and his determination to arrest inflation on any cost (by rising rates till 4.6% till 2023 end) has not been taken positively by the markets. US Markets and other foreign markets were down and SGX Nifty gave negative cues in the morning. It was clear that Nifty and Bank Nifty both will open negative but it was interesting to see whether buying will happen or not at the dips? Indian Markets have shown great resilience thanks to Liquidity by FIIs and DIIs. China Plus One helped Indian Markets in last two years. Europe Plus One is helping in this year. Europe is facing high inflation and energy crisis. America is facing Slowdown and some countries are standing on the edge of Recession. Fortunately Indian Markets seems little decoupled by whatever is happening globally. Whether it is inherent strength of Indian Markets or just a bubble waiting to get burst only time will tell. Currently Rupee has depreciated to record levels, inflation is concern, and Stocks are trading at inflated valuations. None of these are affecting sentiments of Indian investors. 16500 has become very strong support level on Nifty. So even if Markets fall from here, we might see good buying opportunity only. Samvat 2079 showed some really interesting stories in India. Stocks which outperformed in the year 2020-21 saw huge profit booking. Tata 1Mg’s disruption and increasing competition in pathology sectors saw heavy decline in stocks like Metropolis, Dr Lal Pathlabs and Thyrocare in this year. Hospital stocks too corrected heavily as Covid-waves were really mind than earlier waves. IT stocks which gained good traction during Work From Home culture of Covid-Times saw 20-30% corrections from their highs. Steel, Aluminum and Mining sector stocks which were roaring high due to increased prices corrected too. Surprisingly rate sensitive stocks like NBFCs and Banks kept Nifty and Bank Nifty managed to higher levels. Auto Numbers were better than last year and Stocks like M & M, Escorts were real winners. Adani Group stocks gave multi-bagger returns to their investors and made Adani second richest person in the world briefly on 17th Sept 2022. Analysts who used to say “Never go short on India” started saying “Adani ko short nahi karneka”. Credit Insights warning about Adani Group’s companies being ‘Deeply overleveraged’ was completely neglected by the Indian Retail Investors. Gautam Adani decided to cancel his plans to de-list Adani Power seeing how much trust retail Investors have in his stocks. In the year 2022, Boycott Bollywood and Cancel culture affected Entertainment and Films Distributions stocks adversely. Aviation stocks saw huge correction due to high Fuel prices and frequent incidents which affected safety of the passengers. Hotel and Amusement Park stocks saw good rise thanks to increasing footfalls. They even raised their Prices which increased their margins. Due to high inflation, investors are hiding in FMCG stocks like ITC, HUL etc. ITC moved faster than Rajdhani Express this year shutting mouth of all the Meme-Makers. Now as the September months is about to end and Navratri and Dusshera is around the corner, we must focus on Festival stocks which can give good returns till Diwali 2022. Diwali is starting from 19th November this year. Stocksbaazigar believes that Defense Sector stocks, Adani Group stocks and Auto Sector stocks which are now highly overvalued might see some profit booking and other sectors which are directly or indirectly linked to Festival season will do good. Sugar sector stocks, Paper Stocks, have given good returns till date due to their high demand and low supply. So I am not mentioning them separately. But yes, Diwali is all about Sweets and Balrampur Chini stock should make your portfolio sweeter. Titan and Kalyan Jewellers might also do good. Tanishq is much aspired and trusted brand in this segment. Hence Titan will be my first choice. Stocks related to Shoes (Bata, Metro, Relaxo) and Clothes (ABFRL, Nykaa, Arvind, Raymonds) etc. can be kept on radar. People do buy lot of things on EMI during Flipkart Big Billion and Amazon Great Indian Festivals. Credit Card companies stocks, Bajaj Finserve and Bajaj Finance stocks etc. can be bought to play this story. Home Appliances made major buying Items during Diwali after Electronics and Clothing. So stocks like Dixon tech, Voltas etc. can be included for two months. In the Beverages, United Spirits can be accumulated. Remember you can hold it till New Year too. Other stocks like Logistics companies which have been corrected can make to your short term portfolio. All Cargo, Snowman logistics seems highly corrected. Diwali can never be completed without lights. Havells, Surya Roshni etc. neglected stocks might surprise you in the coming days. Many people prefer that their new vehicles should reach their homes on Dusshera. But booking of those happens almost 4-6 months ahead. So I don’t think Four-Wheeler can make to my list of Diwali stocks. But I can definity include Bajaj Auto, Hero MotoCorp and TVS in this list. In short, this year Diwali will be much bigger as India has came out of Covid completely. We saw how Ganesh Utsav was celebrated. I am expecting same enthusiasm and same joys in Diwali 2022. People may not be spending much in regular days, but they are spending good on Festivals in 2022 year. So let’s be bullish on Market irrespective of Global cues. We can make good Money till Diwali if we select right stocks and allocate right funds for them. This is just a guiding post. You must do your own research or take advice from your Financial Advisor. Disclaimer: Stocksbaazigar Mr.Deepak Doddamani is not a SEBI registered research analyst. He is NSE’s Certified Investment Analysis Professional, NSE’s Marketing Professional level – 4, AMFI registered Mutual Fund distributor, Authorized Person of IIFL Securities and MBA, B.Tech. He is active in market since 2009.

Fear of Missing Out

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‘Fear of Missing Out’ (FOMO) factor in the Stock Market is driving so much liquidity in Market that every bearish move is being negated by Buyers immediately. On Wednesday when a bearish engulfing pattern was seen in the Nifty Chart, Bears tried to short Market immediately after it opened gap down on Thursday. But Buyers were ready with their cash to invest on every dip, and Nifty managed to close near 10300. On Friday 26th March again Nifty closed above 10300. Nifty is holding 10300 from the last three sessions which clearly shows that it can move towards 10600 again. When Nifty made a bottom at 7511 in the March month many Investors didn’t invest in the market as they were fearing further fall in the Market. Analysts who come on Business Channels talked about 6500, 6100 then. Those who invested at those levels are sitting on 30-35% profits now as most of the stocks gave good rally in the last 3 months. Some even made 52 weeks high. Traders started booking profits since 10,000 levels on Nifty. Still Nifty continued to move towards 10600 thanks to FOMO factor in the Market. Stocksbaazigar won’t be surprised if Nifty attains much bigger targets like 10800, 11000 in the coming days due to this strength in the Index. Nifty will fall again to 7377 again from where it started rallying in a rising wedge pattern. The only question is WHEN? Dow Jones showed good correction on Friday. It has closed near its major support level. But a similar situation of FOMO is prevailing in the US Markets. Fed infused liquidity in the market, provided with stimulus packages, and ensured that Markets won’t crash beyond certain levels. From the experience of the 2008 financial crisis, they learned their lessons and were quick to understand that only ‘Liquidity infusion’ can boost the confidence of Investors in falling Market. Trump Govt started buying Bonds, made some policy changes in lending, and also focussed on reducing China-US Trade war tensions to save their economy. Every accusation on China for spreading Coronavirus fuelled the Trade war between the USA and China in the April-May months. From June, we have seen that President Trump has stopped tweeting about China as he understood that it can affect markets again. FAANG stocks (Facebook, Amazon, Apple, Netflix, Google) are performing well. Foreign Portfolio Investors are searching for cheaper investing avenues like emerging markets to park their money again. They are ready to take Risk-On trades again which is helping Indian stock markets. FIIs are net buyers in Indian Equities in the last 3 months. In India, RBI and Govt of India too ensured that there won’t be any liquidity crunch in the Market. Banks and NBFCs are no more in panic mode. Moratorium related mandates are given by honorable Supreme Court, so there is no confusion anymore. Investors are doing ‘delivery based buying’ in stocks like Bajaj Finance, HDFC Ltd, etc. which shows that they are ready to go against the verdict of Brokerage firms which reduced ratings of these stocks. After Franklin Templeton’s Credit Funds issue, investors redeemed their money from Credit Funds but they continued to do their SIPs in Equity Mutual Funds even during Lockdowns. Many new investors joined the investors club of India. A record number of Demat accounts were opened by brokerage companies in the last 3 months and many investors started the first SIP of their lives during this pandemic. This liquidity in Market increased strength of Market and reduced fear considerably. It attracted investors who were sitting on cash. They were waiting for Market Crash after the second wave of CoronaVirus but Nifty didn’t give up. It took support at 9500 levels and gave a rally of 1000 points in no time. If Nifty remains above 10300 for some more time and keeps achieving higher targets like 10600, 10800; fear of missing out factor will increase further which will take Nifty to 11000 or even 11200 before December 2020 Nifty is trading at 26 PE which seems highly expensive if we consider the earnings of companies in Q1 of FY 2020-21. RSI level is also showing that Nifty is in overbought territory. More than 1 Crore people in the world are infected by Coronavirus now, still Capitalist Market is not seeing it as a NEGATIVE trigger for bringing Indices down. In such a situation, every correction in the Market will only act as a buying opportunity. The V-shaped recovery in the Market has increased greed on Investors. Retail investors will get bull-trapped by big traders very soon. But the question remains the same – WHEN? Sometimes, we fear that it is the Traders Market, as fundamentals don’t support the current levels. But on the other hand, we understand that the market is forward-looking. It has already discounted the effect of a pandemic on economics for the FY 2020-21 and it is rationalizing itself for the Next financial year from right now. Traders with good trading skills don’t fear uncertainty. In fact, they love volatility as it helps them gain more. Only Investors are in a dilemma whether they should wait with Cash in hand or should invest (due to FOMO factor)? Stocksbaazigar suggests you to stop timing the market. You can never catch the bottom. All you can do is analyze the charts and speculate based on it. Investors kept waiting for right levels and Nifty ran by 3000 points, if they had invested it earlier they might have gained good capital gains so far. I hope they won’t regret after Nifty reaches 11,000. If they start investing in small quantities now and keep on adding more in every market fall, they will still remain in the Game. So it’s always better to stay invested rather than feeling left out. Create a watchlist of good fundamental stocks where you want to invest and add small quantities at every dip in the stock prices. Keep your positions light and well-diversified. If you will follow … Read more

Navin Fluorine International Ltd Analysis

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In the summer the demand for coolers, refrigerators and air-conditioners is very high. You will always see smart money investing in stocks like Symphony Ltd, Bluestar, Voltas etc. Very few investors understand the importance of refrigerants gases manufacturers in share market. It is because they fail to connect the link between these chemical companies with summer. It is important to focus on companies like SRF and Navin Fluorine during summer. The reason behind choosing NFIL over SRF is the consistent performance of NFIL in the last 5 years (return of 985% in 5 yrs) and the possible upside in the year 2019. Before starting the Fundamental Analysis of NFIL let’s see some details about the company. Company Profile Company Name: Navin Fluorine International Ltd Company Website: www.nfil.in House Name: P.Mafatlal Group Industry: Chemicals -Others Year of Incorporation: 1998 Regd Off: Vile Parle, Mumbai Market Capital: Rs. 3647.96 Cr Date of Listing: 30th Sept 2003 Sectors: Fine and Speciality Chemicals, Crop Sciences, Refrigerants, and Life Sciences etc. Fundamental Analysis of Navine Fluorine International Ltd. As the name suggests company focusses on Fluorine Chemistry which is an essential part of the Refrigeration industry. Navin Fluorine has a brand called Mafron under which it manufactures refrigeration gases. It also produces inorganic fluorides which are required in pharma and agro sectors. The inorganic fluorides are also used in other industries like Oil and Gas, Glass, Abrasive and electronics too. The third important business of NFIL is large scale manufacturing of Specialty Fluorochemicals required for Agriculture, Pharmaceutical and Petrochemical Industries. It manufactures fluorine-based intermediaries for the speciality chemical industry. The fourth segment of NFIL is CRAMS. Navin Fluorine International Ltd. offers Contract Research and Manufacturing Services for custom chemical synthesis of fluorinated compounds. Navin Fluorine Share Price Current Market Price on NSE on 07/04/2019 is 735.75 52 Week High/Low of NFIL are 579.70/820 Face value: Rs. 2 Number of Outstanding shares: 4,94,46,885 P/E : 23.96 vs Industry P/E : 22.68 EPS-TTM (Rs): 30.71 Book Value/ Share: 199.2 Returns: 1 yr (-8%), 3 yrs( 121%) and 5 yrs (985%) Shareholding pattern of NFIL Promoters: 31.03% General Public: 28.17% NBFC and Mutual Funds: 16.46% Foreign Institutions: 16.08% Others: 7.21% Financial Institutions: 1.06% Key financials of Navin Fluorine Comment: Over the years Navin Fluorine has become highly Cash-rich company with No-debt on it. It has good Assets over liabilities and good cash reserves. Comment: Navin Fluorine is a profitable entity and performing really good. The company has become a Midcap company from a Small Cap company now due to its consistent performance. Comment: NFIL is paying good dividend to its investors. On the completion of its 50 yrs it also announced special dividend. Stocksbaazigar on Navin Fluorine International Ltd. After listening to the Con call of Navin Fluorine on YouTube, I can fairly say that Management of company is confident about the growth from their core business and expecting 30-32% year on year growth. After the laws on Carbon Footprints, organized players like Navin Fluorine International Ltd which was dominant player in Refrigerant gases well-diversified within the Fluoro-chemical businesses which has increased its Product line for better. The acquisition of Manchester Organics Ltd added a portfolio of over 27000 compounds and 3000 IPs to the NFIL. In Dewas, Madhya Pradesh NFIL made strategic investments in cGMP pilot and Multi-purpose plant. As this stock has performed really well in last decade, investors should buy it only on dips and hold them with strict stop losses. Chart of NFIL is really good too. From January to April there is a good delivery-based buying in it. Navin Fluorine International Ltd. company is fundamentally really strong and looks attractive on Technical parameters too. All the 4 BUs of Navin Fluorine will show good growth in the future. A stock of NFIL is a good buy with Stop loss at 698 for the 1-year Target Price of 850. I won’t be surprised to see if the stock over-performs and touches 890 till Dec 2019. Disclaimer: Please note, Stocksbaazigar Mr. Deepak Doddamani is not a SEBI Registered Advisor. He is NSE’s Certified Investment Analysis Professional and NSE’s Certified Marketing Professional Level – 4. Do not consider this post as Recommendation. Stocksbaazigar won’t be responsible for your Profit/Loss. This is an Educational post and should be treated like one. Thank You. Navin Fluorine International Ltd fundamentals explained by Stocksbaazigar

Arvind Fashions Ltd

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Arvind Fashions Ltd Listed Arvind Ltd, India’s leading textile company got demerged on 26th November 2018 into Arvind Ltd (demerged entity), Anup Engineering and Arvind Fashions Ltd. On the 27th November, Arvind Ltd share was trading at 311 Rs per share. On 28th Nov after ex-date, the stock opened at 91 Rs per share and since then we are seeing a gradual decrease in the share price of Arvind Ltd. as most of the debts are now with this parent company. On the other hand, Investors who wanted to get benefited by the corporate action are highly disappointed to see a listing of Arvind Fashions Ltd at the half of the estimated price. Listing fiasco of Arvind Fashions Ltd Analysts suggested that Arvind Fashions Ltd should list between Rs 1200 to 1400 per share. But on 8th March 2019, it listed on Rs. 591.75 per share. For every five shares of Arvind Ltd. investors got 1 share of Arvind Fashions Ltd. formerly known as Arvind lifestyles ltd. So ideally, the base price should have been (311*5) around 1500. Instead, it was taken as 311.5, a share price before the demerger date. Anup Engineering listed at the proper price but Arvind Fashions Ltd disappointed the Investors. The stock closed on the upper circuit of 621.3 by 10 a.m. on listing day i.e. 8th March 2019. Investors are aware of this listing fiasco. Some expert thinks that Price Discovery mechanism happens only once and therefore on Monday 11th March, stock prices won’t get adjusted to 1200+ range. But there are few exceptions who believes that Stock Exchanges will re-adjust the price so that Investors won’t feel cheated. It is important to understand that stock has demerged into 3 different companies now and not in 2. Hence, it may not be a listing fiasco, as some of the Investors are claiming. One thing is confirmed that Arvind Fashions Ltd share will move upwards from here circuit to circuit till it reaches its True price/ Intrinsic price. What should Investors do now? Retail Investors who aren’t aware of this may sell the stocks in a loss in a day or two after listing. It is an opportunity for others to take Fresh positions in the Arvind Fashions Ltd shares. The trick to buy stocks which opens at the upper circuit is very simple. On the trading day (T-day) you have to place an order at 4.99% from the closing price of (T-1) previous trading day during Pre-open session i.e. 9:00 a.m. to 9:07 a.m. to take a chance. If you are lucky, you will get an entry in the stock. But one has to be very careful about newly listed stocks as they are very volatile and can show irregular fluctuations in the share price. History of Arvind Ltd Arvind Fashions Ltd is the fastest growing company of Lalbhai Group. Arvind Ltd (founded as Arvind Mills) is India’s largest Denim Maker established by Padma Bhushan Kasturbhai Lalbhai in Gujarat during British Raj. This group has diversified businesses in different sectors wiz. Textiles, Chemicals, Retail, Engineering, Real estate, Beauty Products etc. Arvind Ltd. took great benefit of Swadeshi Movement during the Independence struggle and became one of the largest Khadi, Dhoti, Saree maker in India. Kasturbhai started with one textile company inherited from his Father in 1917 and then went ahead to buy 12 more textile mills from his competitors (mostly relatives) till 1931. His involvement in freedom struggle and friendship with Gandhiji helped him gain good political and social stand in the Society which indirectly helped his Lalbhai Group. Kasturbhai believed in giving back to Society. Ahmedabad University, IIM Ahmadabad etc. are standing on the lands donated by the Trust of Kasturbhai Lalbhai. There was a phase in Kasturbhai’ s life when Arvind Ltd was under tremendous debt and faced allegations of tax evasion and misappropriation in accounts. He got a clean chit after few years but lost his energy and his health during the legal battle. He retired from business in 1977. In January 1980, he died at the age of 85 in Ahemadabad. Second Innings of Arvind Ltd. The second Inning of Arvind Ltd was started by a new Generation of Lalbhai family. India’s first ever home-grown denim brand Flying Machine was born in 1980. In years to come, Arvind Ltd became the fourth largest manufacturer of Denim Clothes in the World. In 1993, Arvind Ltd introduced International brand ‘Arrow’ to India by opening their flagship stores. By 1995 they introduced Mass Market concept to India through their MegaMart. The year 1995 was a landmark year in the company history thanks to the launching of Ruf n Tuf jeans which was an instant hit in the 90s. Akshay Kumar was the brand ambassador of Ruf n Tuf brand. Arvind Ltd brought brand Excalibur and Wrangler to India in 1997 and 1999 respectively (which are now part of ‘Unlimited’). The association with Globally branded apparells kept increasing in New Millenium too. Arvind Ltd brought Tommy Hilfiger (2004), GANT sportswear (2006), Cherokee (2007), US Polo Association (2009), Nautica, Elle (2012), Ed Hardy, Hanes Innerwear (2013), Calvin Klein (2014), The children’s place, GAP (2015) etc. to India through exclusive licencing and joint ventures. Arvind Ltd. brought Shoe brands like Arrow, USPA, Flying Machine (2015) and Aeropostale (2017) to India. It also launched its own Men’s wear brands like Creyate (2014) and True Blue (2016) in this decade. In the 2016 company entered Online retailing through its e-commerce website nnnow.com On the 8th March 2019, the demerged entities of Arvind Ltd wiz Arvind Fashions Ltd and Anup Engineering listed on the stock exchanges. Shareholder of Arvind Ltd were allotted One share of Anup Engineering (formerly Anveshan Heavy Engineering) for every 27 shares of Arvind Ltd while One share of Arvind Fashions Ltd for every 5 shares of Arvind Ltd.

Wealth Creator Stocks of 2018

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      Wealth Creator Stocks of Calendar year 2018     Last Calender year 2017 was really good for the Indian Share Market thanks to GST and other major economic reforms Government took after Economy recovered from the effect of the biggest fiasco of Demonetization in 2016. Analysts predicted that it will be very difficult to earn good returns in the calendar year 2018 and unfortunately their prediction is turning out to be correct. This year many indices gave single digit to negative returns. The market recovered when the tension between the USA and North Korea resolved for some period but it could not sustain at the top thanks to the USA-China trade war. In 2018, we saw Crude oil prices and Rupee mostly affected the sentiments of Investors. From 3rd of Oct, fortunately, things are in favor of Market and Nifty is showing great rally since then. The Assembly Elections Results of 5 states in December are already factored in in the Nifty level and right now we are witnessing a Santa-Rally. Before FIIs book their profits and go for their Christmas vacation, let us discuss how Indian Markets performed in the Calendar year 2018. This year some Bluechip stocks really performed well.  Let’s see which Nifty 50 stocks gave really good returns in the Calendar year of 2018 in the following table. This year Private sector banks like Kotak Bank, ICICI Bank and Axis Banks gave good returns to investors. The IL & FS Crisis affected NBFCs and HFCs really badly. Money from these sectors shifted to Private Sector banking stocks. That’s why Nifty Bank index could give 7% returns even in such a bad year. Financial Sector stocks like Bajaj Financial Services (22.39%) and Bajaj Finance (48.90%) too performed really well. The year 2018 was really good for IT sector stocks thanks to depreciation of Rupee for most of the year. Stocks like NIIT Technology (80.88%), MindTree (45.14%) and Tech Mahindra (40.95%) gave tremendous returns. The implementation of GST definitely helped some FMCG stocks which gave double-digit returns to their investors. Dabur (31.90%), UBL (33.58%), Marico (27.31%), Colpal (24.07%), GSKCons (22.63%) etc. stocks helped Nifty FMCG give 17.12% returns in 2018. Thanks to HUL (38.78%) which lead this pack. HUL-GSK deal announcement will definitely take HUL further up at new 52-w High level. Some Pharma sector stocks wiz. DivisLab (44.51%), Glenmark Pharma (26.92%) and Biocon (22.92%) managed to recover the Nifty Pharma index from the year lows. This index gave -4.24% return in last 365 days. NSE Auto Index traded in red for most of the year 2018. It gave 18% negative returns in 2018. Still, stocks like ExideIndustry managed to give 27.31% positive returns thanks to the decrease in raw material prices. US-China Trade war affected Nifty Metal sector really bad in 2018.  This index gave -13.65% return in 1 year. Surprisingly JSW Steel (22.19%) made to top 10 performers list of Nifty 50 stock this year. Apart from these stocks, there are many such stocks who created wealth for the Investors. wiz. V-Mart Retail, HEG, Vinati Organics Ltd, L & T Infotech, L & T tech Serve, VIP Industries, Bata, Jubilant Food etc. After the heavy selling of 40-60% in Midcaps and SmallCaps in last year, we can clearly see that Investors prefered to Invest in Large Cap and BlueChip stocks to avoid risk. We saw more buying in highly liquid stocks and front-runners in Market who are always favourites of leading Analysts.  Let’s see how these Wealth Creators of Calendar year 2018 performs till 31st March 2019. If you have followed my Facebook Live videos you will realize that I gave positional calls in most of these stocks at very correct levels wiz. HUL @ 1200 Axis Bank @ 460 Kotak Mahindra Bank @ 1050 Jubiliant Foods @ 900 LT @ 1100 and so on. (Disclaimer: Please note, this post is for educational purpose only. Stocksbaazigar does not take any responsibility of profits/losses of the reader. Please consult your financial Advisor before taking any Investment decision. Mr Deepak Doddamani is NSE’s Certified Investment Analysis Professional and NSE’s Certified Marketing Professional Level -4, but he isn’t SEBI registered Financial Advisor.)

Is Sintex Plastics really a Multibagger stock?

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         In 2017 Diwali, Sintex Plastics Technology Ltd (SPTL) stock was recommended by many experts in their ‘Muhurat Picks’. It was trading above 90 that time. One year target in SPTL was given in the range of 120-180 by different analysts. Retail Investors invested in it hoping it will become a ‘Multibagger Stock’ in a year. Nifty started correcting from 10200 and consensus selling triggered great fall in Midcap companies. Sintex Plastics Technology Ltd. share price too corrected in this fall. SPTL was recently demerged from the Sintex Industries Ltd that year and therefore no Technical Data was available to predict the extent of fall in Share Price of SPTL. This made people think that 70-75 is the right level to accumulate more stocks of SPTL, which resulted in ‘good money following the bad money‘. SPTL formed temporary bottom near 56 and now trading near 61. The question remains the same – Is Sintex Plastics Technology Ltd. really a Multibagger Or is it just a ‘black hole’ sucking money of Investors? In this post we will try to find it out.       Company Info:  Sintex Industries was incorporated as Bharat Vijay Mills Ltd. in 1931. It started its composite textile business in Kalol, Gujarat same year. In 1995, it was renamed as Sintex Industries Ltd. It was listed on BSE in 2000. In September 2016, Board of Sintex Industries approved demerger of its ‘custom moulding business’ and ‘prefab business’ from Sintex Industries to Sintex-BAPL and Sintex-Infra Projects, respectively as wholly owned subsidiaries of Sintex Plastics Technology Ltd. In May 2017, Sintex Industries Ltd. started trading ex-scheme as purely Textile business while all its non-textile businesses were listed under Sintex Plastics Technology Ltd. SPTL is India’s largest water tanks manufacturer. Apart from providing water management solutions, SPTL provides Structural, Electrical, Environmental, Energy, Interior, Material handling, Telecom and Industrial solutions. Sintex Plastics has strong presence in Asia, Africa, Europe and America.   Fundamentals of SPTL:   Let’s discuss these numbers one by one. Market Capital of Sintex Plastics Technology Ltd. (SPTL) decreased significantly after this fall in Share Price. Current Market Capital is 3736.33 Cr. Management is expecting that once the newly listed business gets settled properly and starts making positive cash-flows, it will improve their debt structure too. As company is operating in India and abroad, it has to deal with different loan interest rates and therefore company will take two more quarters to streamline it’s Cash Flow Structure. Management is targeting for Market Capitalization of 10 Cr within 4 yrs. Sales Turnover last quarter was 0.42 Cr. Sintex Plastics Technologies Ltd. reported muted results as there was de-growth of 7% QoQ in revenues. 33% decline in Pre-Fab and Monolithic business affected company performance. If you will see the Second table properly, you will come to know that total income from operations and net sales is increasing quarter to quarter. Then why there is decline in net Profit? Yes, you guessed it right. Taxes, Interests and Depreciation has been adjusted on quarterly basis to streamline the newly listed company which is hardly 1 yr old now (demerged entity). Taxes of 13.3 Cr paid after this quarter. If you remember, one-time legal expenses of demerger process were paid last quarter. Total de-merger cost of 45 Cr reduced net profit last quarter. This quarter GST amount will affect the final calculations again. Company already faced 15 non-working days thanks to GST. Total Assets of the company is 414.20 Cr while net debt is 3330 Cr. Company has reduced debt of Rs. 82 Cr this quarter. Please note, the FCCBs which they converted in equities to reduce the debt has added additional equities of 1.5 Cr in Market. This lead to heavy supply in Market which resulted in profit booking by FIIs who hedged their positions. This was the prime reason behind the share price fall from October. We can say company has managing it’s debt very well which is good news for Investors. No doubt promoters have confidence in company and so they are aiming to increase their stake by more 10% gradually to reach 40% Book Value of the company is 50.80. Current Market Price is 60.80. Share is fairly valued and available at cheap valuations. Downside is limited and upside is 100% considering 1 yr conservative target of 120 given by expert analysts. So clearly, it is attractive opportunity for short to long-term investors. Industry P/E is 36.96. Peers of SPTL are trading at very higher P/Es. This is one more reason why it is the right time to start accumulating the stock. Face value is 1. Company is not giving any dividends to investors as it is recently de-merged entity. F.V is low, so those who invest only for Dividend income should look for better opportunities in Market. Company is not only reducing the debt but also reducing the cost of borrowing, which is good thing. SPTL is not getting any new order from Government but it has 6 months of Govt. projects in their pipeline. SPTL is expecting that before elections of 2019, Govt. will definitely try to do something for Rural population. Govt. Expenditure on affordable housing, Swachcha Bharat (hygiene/plastic toilets), irrigation, water storage and rain water harvesting etc projects will increase, which means more business to SPTL.  Company is not relying completely on Govt. projects. It is focusing more on retail segment. Instead of reaching customers directly, it will focus on creating strong network of agents and distributors. SPTL will focus on CSR related activities to support Govt. in it’s missions. Good for its Prefab business.  Foreign business of SPTL is doing good. European business is on strong footing. SPTL is gaining good market in Africa. In Asia it is among the leaders of the Plastic Industry. So clearly future looks bright too. SPTL has great reputation of providing accurately calibrated water tanks. The quality of Water tanks is so good that one tank can last longer than life of the buyer. … Read more

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