1) Granules India Ltd. ( CMP : 78.80 Rs. , Target Price : 150 , Tenure : 6–8 Months)
Risk Profile : Medium
About the Company:
Granules India Limited is a pharmaceutical company with presence across the pharmaceutical manufacturing value chain, including active pharmaceutical ingredients (APIs), pharmaceutical formulation intermediaries (PFIs) and finished dosages (FDs). The Company operates a healthcare division, Granules Consumer Healthcare (GCH). The Company, through an acquisition, has access to over 10 APIs, as well as intermediates in therapeutic categories, such as anti-histaminic, antihypertensive and anti-convulsants.
Why Granules? (I will try to explain in a simplest way possible)
At current market price of 78.80 , Stock is trading at just 14.38 times of its FY18 earnings and has a EPS of 5.48 Rs.
Book Value is 40 Rs. So P/B is 2.
Dividend yield is 1.27%, Company gives dividend very frequently.
Cash and Cash Equivalent - End of the Year 2017 was 40 Cr., End of the Year 2016 was 110 Cr., End of the Year 2015 was 53 Cr., End of the Year 2014 was 22 Cr., In short , The company is less likely to face cash crunch.
ROE : 18.20% , ROA : 9.30%, ROCE : 13.05%
The best part is company’s net profit margin is 11.66% whereas its peers have only 4.58% (Average).
In terms of shareholding pattern, Promoters are holding 45% stake.
Sales turnover is increasing aggressively over past several years.
Net Profit summery of the company
Granules already delivered 500% returns in just 5 years, Still a BUY CALL.
Granules is almost debt free ( D/E is .14). Generally debt free companies are more stable.
Major MFs have invested a pile of money in Granules
2) GATI ( CMP : 90.80 Rs. , Target Price : 160 , Tenure : 6–8 Months)
Risk Profile : HIGH
About the Company:
Gati Limited is engaged in the express distribution and supply chain solutions. The Company's segments include Express Distribution and Supply Chain, which covers integrated cargo services, such as road, rail and air transportation; Shipping, which covers sea transportation, and Fuel Stations, which covers fuel stations dealing in petrol, diesel and lubricants, among others. Its supply chain solution offers an integrated supply chain service to businesses across industry verticals. It offers third-party logistics and contract logistics services; e-fulfillment centers, and upstream supply chain management services, such as procurement management and order management.
Why GATI? (I will again try to explain in a simplest way possible)
At current market price of 90.80 , Stock is trading at 28 times of its FY18 earnings and has a EPS of 3.18 Rs.
Book Value is 65 Rs. So P/B is 1.4
Dividend yield is 1%. A consistent dividend paying record.
As per its last updated Annual report Gati has a reserves of approx 610 Cr.
Gati has D/e of .54 which means it has debt can be managed.
Its Sales turnover has been increasing QoQ
Due to high cost of raw materials company has incurred loss of 4 Cr. this quarter, otherwise company has delivered a consistent profits.
Gati has already delivered 251% in 5 years.
Stock is BULLISH on charts.
The services sector in Inda is the key driver of India’s economic growth. The sector is estimated to contribute around 54.0 per cent of India’s Gross Value Added in 2017-18 and employed 28.6 per cent of the total population. India’s net services exports during reached US$ 57.60 billion April-December 2017.
Both Stocks Can be bought at this valuation as long term as well as short term investments.
Akshay Seth email@example.com https://www.linkedin.com/in/akshay-seth-1b7a1668/