Fundamental Analysis of Canara Bank – Financials, Future Plans & More

Fundamental Analysis of Canara Bank: The shares of PSU banks have rallied in the last 3-4 months. Historically, public lenders always trailed their private counterparts because of asset quality issues. However, recently investors’ liking for government banks has increased as they reported better earnings and improved asset quality figures.

Canara Bank is one such PSU bank that has reported strong results lately. In this article, we’ll perform a fundamental analysis of Canara Bank.

Fundamental Analysis of Canara Bank

Today we will cover the company’s history, financials, and future plans and also conduct a detailed fundamental analysis of Canara Bank.

Canara Bank – History and Overview

Founded in 1906, Canara Bank is a large-cap public sector bank with a government shareholding of 62.93%. It was set up in Mangalore by Late Shri Ammembal Subba Rao Pai, a leading lawyer, banker, educationist, and philanthropist. 

Over its history of 116 years, the bank acquired other banks, underwent nationalization in 1969, and was merged with Syndicate Bank in 2020. 

As of the writing of this article, Canara Bank stands as the third largest public sector bank in India with a market capitalization of Rs. 52,500 crores.

The universal bank has 9,722 domestic branches, 3 international branches, and 10,750 ATMs serving over 10.4 crore customers. It offers both services:

1. personal banking covering savings & deposits, loan products, mutual funds, insurance, depository, and more
2. corporate banking including advances, supply chain, merchant banking, syndication, IPO monitoring, etc.

Having known about the history of the lender and what it does, let us now move ahead to understand the banking industry landscape as part of our fundamental analysis of Canara Bank.

Industry Overview

The banking sector in India is well-regulated and adequately capitalized. Reserve Bank of India, the nation’s central bank is responsible for the regulation of the industry and keeps a close watch on the sector.

12 public sector banks, 22 private sector banks, 46 foreign banks, 56 rural banks, 1485 urban cooperative banks, and 96 rural cooperative banks make up India’s banking industry. 

Talking about the growth of the industry, from $1.15 trillion in FY16, the deposits across Indian banks have grown at a CAGR of 9.01% every year to $ 2.10 trillion in FY22 (estimated). In terms of the distribution of assets, public sector banks lead with $1.59 trillion against the private sector’s $0.925 trillion according to IBEF.

However, government banks have been losing market share gradually over the last 20 years to private banks. As per the data from RBI, the market share in loans of public banks has dropped to 59.8% in 2020 from 79.41% in 2000.

The growth of the banking sector is closely tied to GDP growth. Credit fuels economic growth thus resulting in the growth of the nation’s banking sector. India Ratings and Research ( Ind-Ra) expects credit to expand by 10% in FY23, double-digit growth in 8 years. 

Going forward, the rise in the working population, increasing disposable income, formalization of credit, higher internet penetration & accessibility, asset recovery, and GDP growth are expected to propel the banking industry in India.

Canara Bank – Income Growth

Looking at the interest income and other income of the bank, we can observe that over that income across heads rose sharply in the FY2020-21 period. The sharp increase is because of the combined figures of Syndicate Bank and Canara Bank.

Syndicate Bank was merged with Canara Bank with effect from 1 April 2020. This renders the comparison of pre-merger and post-merger results incomparable. 

Nevertheless, we can note that the performance of the bank has improved significantly in the last two years. 

The table below presents the provisions & contingencies and net profit figures for the last 5 years. 

Financial Year	Provisions & Contingencies (Rs. Cr.)	Net Profit (Rs. Cr.)
2022	17,502	6,158
2021	17,170	2,957
2020	11,696	-1,921
2019	10,406	696
2018	13,879	-3,873

Canara Bank – NPA, NIM, CASA and Other Important Ratios

In the section above we looked at how Canara Bank has turned around with income increasing ahead of provisions. This section is devoted to understanding important ratios and their impact on the lender’s profitability as part of our fundamental analysis of Canara Bank.

The table below highlights the important ratios of Canara Bank over the last five years.

Key Ratios (%)	FY18	FY19	FY20	FY21	FY22
Gross NPA	11.84	8.83	8.21	8.93	7.51
Net NPA	7.48	5.37	4.22	3.82	2.65
PCR	58.06	68.13	75.86	79.68	84.17
NIM	2.42	2.63	2.29	2.76	2.82
CASA	34.28	30.86	32.59	34.33	35.88
Capital Adequacy	13.22	11.9	13.65	13.18	14.9
Return on Assets	-0.75	0.06	-0.32	0.23	0.48
Return on Equity	-16.74	1.4	-8.05	6.71	12.82

From the data above, we can note that the performance of the lender has improved sharply even from two years perspective. 

1. Gross and net non-performing assets have decreased signaling improved profitability of the company.
2. PCR or Provisioning Coverage Ratio tells how much funds the management has set aside for losses due to bad debts. The higher ratio in the recent fiscal points to increased prudence of the management.
3. Net interest margin or NIM has expanded highlighting the growth in profitability for the lender’s operations, i.e. sourcing funds at a lower cost and disbursing at higher interest rates.
4. Along the same line, its CASA ratio has shown that the bank has accumulated more current and savings account deposits as a percentage of the total deposits. This way it is obtaining funds at a lower cost because it has to pay higher interest on term deposits.
5. Capital Adequacy has gotten better as well pointing to the more muscular strength of the lender’s capital base to bear losses in any economic catastrophe.

Canara Bank – Future Plans 

So far we have looked at only past years’ financial statements as part of our study of the fundamental analysis of Canara Bank. This section looks at what lies ahead for the company and its investors.

1. In FY23, the management had planned to Rs. 9,000 crore capital via bonds. By half year, it had raised Rs. 6,000 crores, moving well on its path to meeting its target of capital expansion and increasing its loan book subsequently.
2. It has upped its digital offerings including revamped mobile banking apps and websites for internet banking to compete with leading banks. Improved focus on these digital initiatives is expected to drive long-term customer satisfaction and attract more customers.

Canara Bank – Key Ratios

We are almost at the end of our fundamental analysis of Canara Bank Let us have a quick look at its key metrics.

CMP	₹289	Market Cap (Cr.)	₹52,500
EPS	₹46.60	Stock P/E	5.65
ROA	0.48%	ROE	12.8%
Face Value	₹10.0	Book Value	₹386
Promoter Holding	62.9%	Price to Book Value	0.76
NIM	2.82%	Dividend Yield	2.23%
Gross NPA	7.51%	Net NPA	2.65%

In Conclusion

In this article, we saw how improved asset quality with earnings growth has contributed to better prospects and returns to the investors of the public lender.

Our fundamental analysis of Canara Bank covered that its overall metrics have improved since the merger. The bank has posted record profits and revamped focused on digital offerings making it stand in line with other leading banks in India. 

Going forward, the management has a huge responsibility to bring asset quality and net interest margin at par with the likes of HDFC Bank, Kotak Mahindra Bank, and more.

In your opinion, will Canara Bank be able to deliver the standards set by private lenders over time? How about you let us know in the comments below?

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Uniparts India IPO Review – GMP, Strengths, & Much More!

Uniparts India IPO Review: Uniparts India Limited is coming up with its Initial Public Offering. The IPO will open for subscription on November 30th, 2022, and close on December 2nd, 2022. It is looking to raise Rs 835.61 crore whole of which will be an Offer for Sale.

In this article, we will look at the Uniparts India IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out!

Uniparts India IPO Review – About The Company

Uniparts India Limited, established in the year 1994, is a global manufacturer of engineered systems and solutions. It is one of the leading suppliers of systems and components for the off-highway market in agriculture and construction, forestry, and mining (“CFM”) and aftermarket sectors.

The company has an estimated 14.45% market share of the global 3PL market in Fiscal 2021. Also, it has an estimated 5.87% market share in the global PMP market in the CFM sector in Fiscal 2021 in terms of value.

The company has a global footprint and presence in more than 25 countries with a major focus on serving customers across countries in North and South America, Europe, Asia, and Australia, including India.

The company has 5 manufacturing facilities in India. In addition to that, Uniparts India also has a manufacturing, warehousing, and distribution facility in the United States and a warehousing and distribution facility in Germany.

The product portfolio of the company

• 3-point linkage systems (3PL) 
• Precision Machined Parts (PMP)
• Hydraulic Cylinders
• PTO 
• Fabrications

The competitors of the company

The company does not have any listed industry peers in India.

Uniparts India IPO Review – Financial Highlights

(Source: DRHP of the company)

Industry Overview

According to a CRISIL Report, The world market for 3-point linkages (3PL) was estimated at USD 320 million in 2020 and is expected to grow by nearly 6% to 8% between 2020 and 2025 on the back of robust growth in tractor production.

The global market for PMP for articulated joints was USD 520 million in 2020. Going further, demand for PMP products is expected to grow at a CAGR of 7% and 9% between 2020 and 2025, powered by strong volume growth in construction equipment production.

Strengths

• The company has a leading market presence in the global off-highway vehicle systems and components segment.
• The company is a vertically integrated precision solutions provider.
• The company follows a global business model optimizing cost-competitiveness and customer supply chain risks.
• The company has strong and long-standing relationships with key global customers, including major Original Equipment Manufacturers (OEMs).
• They have strategically located manufacturing and warehousing facilities that offer scale and flexibility to the business.

Weaknesses

• The company’s operations are highly dependent on raw materials such as steel, power, and fuel. Any non-availability or changes in price can impact the business.
• The company has overseas operations. Thus it is highly exposed to currency exchange rate fluctuations.
• The products of the company are used in seasonal businesses such as agriculture and CFM sectors. Thus, the nature of their operations is Seasonal.
• The company is labor intensive thus it may be subject to work stoppages, strikes, or other types of conflicts. This will have an adverse effect on the company.
• There are certain legal proceedings involving the Company its Subsidiaries, and its Directors and Promoters.

Uniparts India IPO Review – GMP

The shares of Uniparts India traded at a premium of 13.86% in the grey market on November 29th, 2022. The shares tarded at Rs 657 This gives it a premium of Rs 80 per share over the cap price of Rs 577. 

Uniparts India IPO Review – Key IPO Information

Promoters:  Gurdeep Soni and Paramjit Singh Soni.

Book Running Lead Managers: Axis CapitalLimited, DAM Capital Advisors Limited, and JM Financial Limited.

Registrar To The Offer: Link Intime India Private Limited.

Particulars	Details
IPO Size	₹835.61 Crore
Fresh Issue	-
Offer for Sale (OFS)	₹835.61 Crore
Opening date	November 30, 2022
Closing date	December 2, 2022
Face Value	₹10 per share
Price Band	₹548 to ₹577 per share
Lot Size	25 Shares
Minimum Lot Size	1 (25 Shares)
Maximum Lot Size	13 (325 Shares)
Listing Date	December 12, 2022

The Objective of the Issue

The Net Proceeds from the Fresh Issue are proposed to be utilized for:

• To carry out the Offer for Sale of up to 1,57,31,942 Equity Shares by the Selling Shareholders.
• Achieve the benefits of listing the Equity Shares on the Stock Exchanges.

In Closing

In this article, we looked at the details of Uniparts India IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

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Top Stocks Under Rs 4500 to add to your watchlist – Detailed Analysis

Top Stocks Under Rs 4500: Investors across the world are running to safe haven of old businesses as crypto and US tech stocks fall like crazy. ‘Buy the dip’ has burnt holes in the portfolios prompting investors to wonder where to invest.

Well, it might be time to come back to the Indian stock market and pick some time-tested companies. In this article, we present you the top stocks under Rs 4500 which you can add to your watchlist.

Top Stocks Under Rs 4500

There are so many top stocks under Rs 4500 trading on BSE and NSE. In this article, we have put together the top stocks to choose from.

Top Stocks Under Rs 4500 #1 – DMart

CMP	₹4,180	Market Cap (Cr.)	₹271,000
EPS	₹35.60	Stock P/E	117
ROCE	15.8%	ROE	11.5%
Face Value	₹10.0	Book Value	₹232
Promoter Holding	75.0%	Price to Book Value	18.1
Debt to Equity	0.05	Dividend Yield	0.00%
Net Profit Margin	4.82%	Operating Profit Margin	8.08%

Avenue Supermarts, the holding company of the supermarket chain DMart was launched in 2002 in Powai, Mumbai. It was founded by Radhakishan Damani, a billionaire investor, and businessman.

DMart is a retail supermarket chain that sells home and personal products. It retails products including but not limited to food, toiletries, kitchenware, home appliances, beauty products, and bed and bath linen. 

It has a wide presence in 294 locations in India and covers states such as Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, and others.

DMart’s cluster-based expansion strategy has allowed it to keep its costs low giving it a pricing edge over its competitors. Additionally, the business boasts a high fixed-asset turnover ratio and a high inventory turnover ratio of 3.1 and 12.8 respectively making it a volume-led business.

For FY22, foods accounted for 56.86% of revenue share followed by general merchandise and apparel brought in 23.40% of the company’s sales. Non-food FMCG makes up 19.74% of the profits.

As for the five-year performance, DMart’s revenue from operations has increased at a CAGR of 15.13% from Rs. 15,009 crores in FY18 to Rs. 30,353 crores in FY22. During the same period, the retailer compounded its profit after tax along the same lines at an annual rate of 15.54% to Rs. 1,616 crores in FY22.

Top Stocks Under Rs 4500 #2 – Pfizer

CMP	₹4,446	Market Cap (Cr.)	₹20,500
EPS	₹97.30	Stock P/E	40.8
ROCE	29.2%	ROE	23.3%
Face Value	₹10.0	Book Value	₹626
Promoter Holding	63.9%	Price to Book Value	7.09
Debt to Equity	0.01	Dividend Yield	0.79%
Net Profit Margin	23.40%	Operating Profit Margin	32.0%

Pfizer India is the Indian subsidiary of American multinational pharmaceutical and biotechnology giant Pfizer Inc. The parent company holds a majority stake of 63.9% in the company.

Pfizer was originally started in 1849 by two Germans: Charles Pfizer and Charles F. Erhart. Compared to the holding company, its Indian arm has a history of 7 decades. Pfizer India was subsequently listed on the Bombay Stock Exchange in 1996.

It is the fourth-largest pharma company in India and has a broad portfolio of over 150 products from 15 therapeutic lines. It operates a large production facility in India churning out more than a billion tablets every year.

Some of its top brands are Prevenar 13, Corex – DX, Dolonex, Enbrel, Becosules, and Folvite among others.

Pfizer India is a debt-free pharma stock with high return ratios of capital and equity at 29.2% and 23.3% respectively. Talking about the price performance of the company’s shares, they have generated a return of 155% in the last five years. This translates into an impressive return of 20.57% every year compounded annually.

Top Stocks Under Rs 4500 #3 – Apollo Hospitals

CMP	₹4,400	Market Cap (Cr.)	₹63,000
EPS	₹61.40	Stock P/E	71.6
ROCE	17.8%	ROE	16.6%
Face Value	₹5.0	Book Value	₹391
Promoter Holding	29.3%	Price to Book Value	11.3
Debt to Equity	0.72	Dividend Yield	0.28%
Net Profit Margin	6.06%	Operating Profit Margin	14.90%

Apollo Hospitals was established in the early 1980s. The company began its commercial operations on February 1st, 1984. Fast forward to today, Apollo Hospitals has positioned itself as a diverse healthcare ecosystem. It is a leading player both in terms of hospitals and the number of beds available in India.

Along with its state-of-the-art hospitals, Apollo also runs clinics, a diagnostics chain, dental centers, specialized pediatric hospitals, and pharmacy outlets. It has 9,911 beds across 71 hospitals. Its pharmacy business is one of the largest pharmacy store chains in India with 4,761 outlets.

In addition to offline retail, Apollo 24×7 is the digital arm of the company that provides online consultation and delivery of medicine orders. Together, pharmacy distribution and Apollo 24×7 accounted for 39% of the company’s revenue in Q1FY23.

Apollo Hospitals has comparatively a lower promoter holding of 29.3%. FIIs own a large 49.09% chunk of the company, betting on the nation’s growing healthcare market. 

This healthcare stock has scaled its revenues at a CAGR of 12.21% from Rs. 8,243 crores in FY18 to Rs. 14,663 crores in FY22. During the same period, its profits grew multi-fold to Rs. 1,108 crores in FY22 from only Rs. 60 crores in FY18.

Top Stocks Under Rs 4500 #4 – SKF India

CMP	₹4,375	Market Cap (Cr.)	₹21,500
EPS	₹90.00	Stock P/E	48.6
ROCE	30.6%	ROE	22.9%
Face Value	₹10.0	Book Value	₹381
Promoter Holding	52.6%	Price to Book Value	11.5
Debt to Equity	0.01	Dividend Yield	0.33%
Net Profit Margin	10.80%	Operating Profit Margin	15.20%

SKF India is the Indian subsidiary of AB SKF, a Swedish bearing and seal manufacturing company founded in 1907. It entered India in 1923. As of the present date, SKF India is one of the leading providers of solutions for rotating equipment in automotive and industrial verticals.

SKF supplies its bearings, seals, and lubrication systems to over 40 industries all over the world. It has a leading market position in railway, automotive, heavy industries, and industrial distribution industries.

The company has a pan-India presence with 3 production sites, 12 offices, and a wide supplier network of more than 680 distributors. Its dedicated workforce of 1,681 professionals gives it a status of a knowledge-driven engineering company.

It carries nil debt and has a high return on equity of 22.9% and a return on capital of 30.6%. Promoter ownership of the parent company stands at 52.6%. The company’s revenues have grown at a slow pace of 5.92% annually over the last five years from Rs. 2,750 crores in FY18 to Rs. 3,666 crores in FY22.

Top Stocks Under Rs 4500 #5 – Solar Industries India

CMP	₹3,996	Market Cap (Cr.)	₹36,000
EPS	₹56.8	Stock P/E	70.4
ROCE	25.4%	ROE	25.3%
Face Value	₹2.0	Book Value	₹212
Promoter Holding	73.2%	Price to Book Value	18.9
Debt to Equity	0.48	Dividend Yield	0.19%
Net Profit Margin	11.60%	Operating Profit Margin	19.00%

Solar Industries was founded by Satyanarayan Nandlal Nuwal in 1995. Over the last 27 years, it has scaled from a single-site manufacturing enterprise into a global industrial explosives powerhouse.

Solar has two revenue segments: industrial explosives and defense. 

Its industrial explosives range of products includes packaged, bulk explosives and initiating systems that find uses in underground mines, quarrying, road cutting, canal excavation, civil construction, and more.

Its line of products for defense & military applications develops explosives for grenades, medium & high-caliber ammunition, warheads, bombs, drones, and more. The defense segment accounted for 8% of the consolidated revenues of the company in FY22.

The explosives and chemicals stock has a high promoter holding of 73.2%. As of June 2022, it had an order book of Rs. 3,843 crores. 

During the past five years, its revenues have increased at a CAGR of 15.58% from Rs. 1,916 crores in FY19 to Rs. 3,948 crores in FY22. At the same time, Solar Industries’ stock price moved twice this pace at an annual rate of 30.20% generating an impressive 274% return for its shareholders.

List of Top Stocks Under Rs 4500 

We covered five top stocks under Rs 4500. The table below lists more such companies with stock price trading below the Rs. 4500 mark.

Company Name	Industry	CMP (Rs.)	Market Cap (Rs. Cr.)
Avenue Supermarts	Retail	4,180	271,000
Pfizer	Pharmaceutical	4,446	20,500
Apollo Hospitals Enterprise	Healthcare	4,400	63,000
Solar Industries India	Explosives	3,996	36,000
SKF India	Industrial Products	4,375	21,500
Procter & Gamble Health	Pharmaceutical	4,216	7,000
Info Edge (India)	Internet & Technology	3,930	51,000
Gujarat Fluorochemicals	Chemicals	3,825	3,825
ICRA	Financial Services	4,072	3,930

In Conclusion

In this article, we covered five top stocks under Rs 4500. We noticed how Avenue Supermarts and Solar Industries have promoter holding at/near the upper range of 75%. Two of the five companies are Indian subsidiaries of their overseas parent companies. Along with other such qualities, the list above is diverse with stocks from different industries.

Similarly, investors should also seek diversification in their portfolios.

How about you tell us in the comments below what is your approach to building a world-class portfolio? Looking forward to an enlightening conversation.

You can now get the latest updates in the stock market on Trade Brains News and you can even use our Trade Brains Portal for fundamental analysis of your favorite stocks.

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Fundamental Analysis Of Tata Power – Industry, Future Plans & More Details

Fundamental Analysis of Tata Power: The operations of the Tata Group companies seem to be as diversified as the group itself. At one end we have Adani’s three different companies in the green energy, power generation, and transmission sectors. At another end of the spectrum, Tata Power Company Ltd. stands with all three businesses under one umbrella.

Being so diverse, and with 100+ years of legacy, a fundamental analysis of Tata Power is a must.

Fundamental Analysis of Tata Power

In this article, we shall perform a fundamental analysis of Tata Power. We’ll start by getting ourselves acquainted with the history and business of the company, followed by an industry overview.

Later, a few sections are devoted to revenue growth, return ratios, and debt analysis. A highlight of the future plans and a summary conclude the article at the end. Without further ado, let us jump in.

Company Overview

Tata Power Company Ltd. (TPCL) traces its origins to 1910 when it was founded as Tata Hydroelectric Power Supply Company. It was merged with the Andhra Valley Power Supply Company later in 1916. Over the years, it has grown to become one of the largest integrated power companies in India.

This power company has operations across renewable energy production, conventional energy generation, distribution & transmission, and next-gen power solutions. TPCL has a presence in India, Bhutan, Nepal, South Africa, Singapore, Indonesia, Georgia, and Zambia.

As one of the nation’s largest renewable energy companies, it has

1. wind power production capacity of 932 MW across 7 Indian states
2. solar generation installed capacity of 2,688 MW 

Additionally, Tata Power also commissions solar rooftop and microgrid projects. It has a solar module manufacturing capacity of 400 MW and a cell capacity of 300 MW. It provides solar pumps and solar-powered water solutions as well.

Talking about Tata’s conventional energy operations, it has 4 hydropower plants with a total installed power generation capacity of 693 MW. Its thermal generation capacity stands at 9032.5 MW and waste heat generation capacity at 240 MW respectively.

As part of its fast-growing next-gen power solutions, TPCL provides solar rooftop EPC, EV charging stations, home automation, and energy management solutions.

Last but not least, Tata Power is also present in the power transmission and distribution business. It supplies electricity to more than 12 million customers in Delhi, Mumbai, Ajmer & Odisha. It has a vast distribution network of over 4 lac circuit kilometers (KM) and 3,531 KM of the transmission network.

Are you awestruck by the broadness of Tata Power’s operations? Catch a breath of fresh air. Next, we move ahead to get an industry overview as part of our fundamental analysis of Tata Power Company.

Industry Overview

India is the third largest electricity producer in the world with an installed power generation capacity of over 3,99,496 MW. The nation’s capacity grew at a CAGR of 8.1% over the last decade. 

Out of the total production, coal-fired power plants accounted for 53% of the total energy produced. It was followed by the 27% share of renewable energy generation.

India’s transmission infrastructure has always lagged behind its power generation capabilities. Thus, there is an extra focus to streamline energy transmission operations with the country’s production capacity.

The nation grew its transmission capacity at a CAGR of 6% from 3,20,000 circuit kilometers (ckm) in 2016 to 4,56,716 lacs ckm in 2022. Similarly, the transformation capacity increased from 8,26,958 MVA to 10,79,766 MVA during the same period. 

At the end of FY22, the country’s renewable energy capacity was recorded at 156.61 GW, 39.2% of the nation’s total installed energy capacity. Thus, the sector is projected to grow at a CAGR of 14.23% every year. 

There is another noteworthy topic of India’s growth story. Even though energy consumption has doubled since 2000, India’s energy use on a per capita basis is less than half of the world average. This supports the argument that overall power demand in India is expected to grow at a strong pace.

Having covered the power industry landscape, let us now move on to the revenue and net-profit growth of the company as per our fundamental analysis of Tata Power Company Limited.

Tata Power – Financials

Revenue and Net-profit Growth

The revenues of TPCL have grown at a CAGR of 9.79% over the last 5 years. As for the net profit, it was unusually high in FY18 and FY19. After that, it fell sharply and touched Rs 2,156 crore in the last fiscal only.

The sudden fall in net profit was because of one-time line items. FY18 and FY19 saw a reversal of impairment and profit on sale on investment in associates to the tune of Rs 1,887 crore and Rs 1,897 crore respectively.

The table underneath presents the revenue growth and net-profit growth of Tata Power Company for the previous five fiscal years.

Year	Revenue (Rs. Cr.)	Net Profit (Rs. Cr.)
2022	42,816	2,156
2021	32,703	1,439
2020	29,136	1,316
2019	29,881	2,606
2018	26,840	2,611

Operating-Profit and Net Profit Margins

The table below displays the operating profit and net-profit margins of Tata Power Company for the previous five financial years.

Year	OPM (%)	NPM (%)
2022	15.56	5.04
2021	21.27	4.40
2020	18.15	4.52
2019	10.27	8.72
2018	8.55	9.73

We can note here that the effect of one-time gains is visible in FY18 and FY19 with a net-profit margin comparatively higher. However, we can notice how the profits have reduced post this. Profit Margins improved in FY22 but the operating margin took a hit at the same time falling to 15.56% from 21.27% a year ago.

Debt/Equity Ratio and Interest Coverage Ratio

TPCL’s debt-to-equity ratio marginally increased in FY22 as the company incurred more liabilities. It was on a downward trend before that with the company paying back debt.

The table below presents the debt/equity ratio and the interest coverage ratio of Tata Power Company for the last five financial years.

Year	Debt/Equity	Interest Coverage
2022	2.12	2.18
2021	1.85	1.84
2020	2.47	1.31
2019	2.68	1.14
2018	2.76	1.16

Return Ratios: ROE & ROCE

Talking about the return ratios of the power company, they have remained lower below 10% except for FY18 and FY19. Tata Power clocked sharp revenue growth of 30.92% which resulted in better return ratios in the last fiscal.

The following table highlights the return on equity (RoE) and returns on capital employed (RoCE) of Tata Power Company for the last five fiscal years.

Year	NPM (%)	NPM (%)
2022	7.75	7.22
2021	5.41	6.80
2020	5.63	9.44
2019	14.02	8.52
2018	16.16	9.88

Future Plans of Tata Power

So far we have looked at only previous years’ results as part of our fundamental analysis of Tata Power Company. Let us get to know what lies ahead for the company and its investors.

1. Tata Power and Norway-headquartered SN Power partnered in 2018 to develop hydropower projects in India and Nepal.
2. TPCL has plans to increase its share of non-fossil fuel energy to 40-50% by 2025. Presently, 34% of the portfolio is in clean energy.
3. The company aims to achieve 22,500 MW power generation capacity by 2025 as part of its ‘Strategic Intent 2025’ with 100% fuel securitization.
4. As for its transmission and distribution business, TPCL hopes to install a transmission network of 15,000 CKM and reach 40 lakh customers in the next three years.
5. The management has earmarked a large capital expenditure of more than Rs 75,000 crore for growing the renewable portfolio overall.

Fundamental Analysis Of Tata Power – Key Metrics

We are now at the end of our fundamental analysis of Tata Power. Let us take a quick look at some of the key financial metrics of the company.

CMP	₹229	Market Cap (Cr.)	₹73,000
EPS	₹7.96	Stock P/E	28.8
ROCE	9.3%	ROE	8.42%
Face Value	₹1.0	Book Value	₹80
Promoter Holding	46.9%	Price to Book Value	2.85
Debt to Equity	2.07	Dividend Yield	0.76%
Net Profit Margin	5.27%	Operating Profit Margin	15.60%

In Conclusion

In our fundamental analysis of Tata Power above, we got ourselves acquainted with the diverse nature of the company. And the company is not just diverse in terms of segments, it also has a geographical diversity with a worldwide presence.

In your opinion, does this make TPCL a slow-growing company? Should the Tata Group consider de-merging the companies like Adani’s? Will TPCL be able to continue its FY22 growth figures in the future? What are your thoughts on Tata Power Company?

How about we continue this conversation in the comments below?

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Dharmaj Crop Guard IPO Review 2022 – GMP, Strengths, & More!

Dharmaj Crop Guard IPO Review: Dharmaj Crop Guard Limited is coming up with its Initial Public Offering. The IPO will open for subscription on November 28th, 2022, and close on November 30th, 2022. It is looking to raise Rs 251.15 crore, out of which Rs 216 crore will be a fresh issue and the rest Rs 35.15 crore will be an Offer for Sale. 

In this article, we will look at the Dharmaj Crop Guard IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out!

Dharmaj Crop Guard IPO Review – About The Company

Dharmaj Crop Guard is an agrochemical company that is engaged in the business of manufacturing, distributing, and marketing a wide range of chemicals. Its products include insecticides, fungicides, herbicides, plant growth regulators, micro fertilizers, and antibiotics that are supplied to B2C and B2B customers.

Their products are sold in 12 states through a network comprising over 3,700 dealers having access to 8 stock depots in India, as of November 30, 2021.

The company has a strong international presence as it exports its products to more than 20 countries including Latin America, East African Countries, the Middle East, and Far East Asia.

Some of the key customers of the company include Atul Limited, Heranba Industries Limited, Innovative, Meghmani Industries Limited, Bharat Rasayan Limited, and Oasis Limited.

In addition to that, the company manufactures and sells general insect and pest control chemicals for Public Health protection such as crop protection solutions to the farmers.

The product portfolio of the company

• Insecticides: Their top branded products include Padgham, Lubrio, Nilaayan, Dahaad, Prudhar, and Remora amongst others.
• Fungicides: Their top branded products include Gagandip, Sajaag, Lokraj, Rishmat, and Kaviraj amongst others.
• Herbicides: Their top branded products include Dharozar, Aatmaj, Rodular, Dharolik, Kohha, Kawayat Super, and Sadavirum amongst others.
• Plant growth regulator: Their top branded products include Rujuta, Greenoka, and Stabilizer amongst others.
• Micro Fertilizers: Their top branded products include Zeekasulf, Aakuko, Thandaj, and Zusta amongst others
• Antibiotic: They sell brand products namely Retardo.

The competitors of the company

(Source: DRHP of the company)

Dharmaj Crop Guard IPO Review – Financial Highlights

(Source: DRHP of the company)

Dharmaj Crop Guard IPO Review – Industry Overview

The Indian pesticide industry is primarily divided into Insecticides, Fungicides, and Herbicides. Insecticides account for a major share of around 55% followed by herbicides and fungicides with an approximate share of 23% and 18%, respectively.

In the global agrochemicals market, India is the 4th largest producer led by the USA, Japan, and China. Along with that, India has also emerged as the 13th largest exporter of pesticides globally.

According to  Company Commissioned CareEdge Report, the overall Indian pesticides, and other agrochemicals market grew at a CAGR of 4.5% from Rs.368 billion in 2013-14 to Rs.439 billion in 2017-18. 

Moving forward, the industry is expected to grow at a CAGR of 5.2%-5.7% by 2023-24 on account of an upward growth expected in the international market and a likely increase in domestic usage of pesticides in India.

Strengths

• The company has a strong and diversified product portfolio.
• The company has been able to develop strong distribution channels and stable relationships with its customers over the years.
• The company has a strong Research and Development (“R&D”) facility with a focus on innovation and sustainability. 
• The company is led by experienced Promoters and a management team.
• The company has strong and effective branding, promotional, and digital strength.

Weaknesses

• The company is subject to strict technical specifications, quality requirements, regular inspections, and audits by the government and its customers. Any deviation will lead to a negative impact on their reputation.
• The nature of the business is cyclical as the sale of its products is subject to seasonal variations and climatic conditions.
• New-age pest management and crop protection measures, such as organic farming, biotechnology products, pest-resistant seeds, or genetically modified crops can be an emerging threat to their product.
• The products of the company can be hazardous to its worker’s health and the environment. Thus, it is subject to stringent regulations, deviation from which could attract hefty fines.
• The company has certain outstanding litigation proceedings against them, their promoters, and their Directors.

Dharmaj Crop Guard IPO Review – GMP

The shares of Dharmaj Crop Guard traded at a premium of 18.99% in the grey market on November 24th, 2022. The shares tarded at Rs 282. This gives it a premium of Rs 45 per share over the cap price of Rs 237. 

Dharmaj Crop Guard IPO Review – Key IPO Information

Promoters: Rameshbhai Ravajibhai Talavia, Jaman Kumar Hansrajbhai Talavia, Jagdishbhai Ravjibhai Savaliya, and Vishal Domadia.

Book Running Lead Managers: Elara Capital (India) Private Limited and Monarch Networth Capital Limited. 

Registrar To The Offer: Link Intime India Private Limited.

Particulars	Details
IPO Size	₹251.15 Crore
Fresh Issue	₹216 Crore
Offer for Sale (OFS)	₹35.15 Crore
Opening date	November 28, 2022
Closing date	November 30, 2022
Face Value	₹10 per share
Price Band	₹216 to ₹237 per share
Lot Size	60 Shares
Minimum Lot Size	1(60 Shares)
Maximum Lot Size	14 (840 Shares)
Listing Date	December 8, 2022

The Objective of the Issue

The Net Proceeds from the Fresh Issue are proposed to be utilized for:

• Funding capital expenditure towards setting up a manufacturing facility at Saykha Bharuch, Gujarat.
• Funding incremental working capital requirements.
• Repayment and/or pre-payment, in full and/or part, of certain borrowings.
• General corporate purposes.

In Closing

In this article, we looked at the details of Dharmaj Crop Guard IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

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Penny Stocks Under Rs 5 to add to your watchlist – Detailed Analysis

Penny Stocks Under Rs 5: Investors run after penny stocks because of the prospects of earning multi-bagger returns. Penny stocks are high-risk/reward bets that can go in any direction pretty quickly. While the old adage of avoiding penny stocks still holds true, we have compiled a list of top penny stocks under Rs 5 below if you still want to go big or go home. 

Penny Stocks Under Rs 5

In this article, we have put together the top penny stocks under Rs 5 which risk-taking investors can add to their watchlists. In the company description, we talk about the business and key metrics which make these penny stocks attractive.

Before we jump to the list, a short section is devoted to understanding the research methodology.

Research Methodology

The list has covered stocks trading between Rs 5 and Rs 1 only. We have kept the upper range of market capitalization at Rs 1,000 crore. Additionally, the debt to equity upper limit was set as 1 to avoid heavy debt penny stocks. 

Along with this, a filer for a minimum promoter holding of 40% was set with both return ratios (RoCE and RoE) being more than 1.

Having acquainted ourselves with the filters used, let us now move ahead to know the top stocks under Rs 5 mentioned in this article.

Penny Stocks Under Rs 5 #1 – Vertex Securities 

CMP	₹2.48	Market Cap (Cr.)	₹18.4
EPS	₹0.04	Stock P/E	65.6
ROCE	8.89%	ROE	2.95%
Face Value	₹2.0	Book Value	₹1.3
Promoter Holding	73.4%	Price to Book Value	1.9
Debt to Equity	0.66	Dividend Yield	0.00%
Net Profit Margin	3.04%	Operating Profit Margin	15.4%

Vertex Securities is an end-to-end digital platform for trading in equity and derivatives (futures and options). It is a small-cap company listed on the Bombay Stock Exchange since 1993. The company has main offices in Cochin and Mumbai.

Over the years, Vertex has emerged as one of the major players in India’s financial services sector. It provides technology for trading/investing in stocks, commodities, currency markets, IPOs, and mutual funds through a mobile app and website.

It boasts a pan-Indian presence with a network of 250 offices across India. The financial services company has a high promoter holding of 73.4%, out of which 53.04% is held by Transwarranty Finance, a full-service investment banking company. 

Its revenues have grown from Rs. 8.17 crore in FY18 to Rs. 9.21 crore in FY22. At the present price of Rs. 2.48, it is a penny stock with an attractive price-to-book value ratio of 1.9.

Penny Stocks Under Rs 5 #2 – Swasti Vinayaka Art & Heritage Corporation

CMP	₹2.84	Market Cap (Cr.)	₹25.6
EPS	₹0.25	Stock P/E	11.4
ROCE	11.50%	ROE	9.05%
Face Value	₹1.0	Book Value	₹1.88
Promoter Holding	51.0%	Price to Book Value	1.51
Debt to Equity	0.42	Dividend Yield	0.00%
Net Profit Margin	14.40%	Operating Profit Margin	27.2%

Swasti Vinayaka Art & Heritage Corporation is a diversified company with three revenue streams. To start with, it manufactures carvings of precious and semi-precious stones, paintings, and jewelry. 

It also receives compensation against a property.

In addition to this, it has funds devoted to long-term investments in blue-chip stocks. The management makes use of fundamental analysis and an in-house technical analysis model to achieve consistent returns.

The company is based out of Lower Parel, Mumbai, Maharashtra. Swasti Vinayaka Art & Heritage Corp. has a low debt-to-equity ratio of 0.42 with high-profit margins. The stock presently trades at an attractive book value of 1.51 and has a promoter holding of 51%.

Penny Stocks Under Rs 5 #3 – Luharuka Media & Infra

CMP	₹2.62	Market Cap (Cr.)	₹24.6
EPS	₹0.07	Stock P/E	37.2
ROCE	5.31%	ROE	4.11%
Face Value	₹1.0	Book Value	₹1.55
Promoter Holding	51.5%	Price to Book Value	1.69
Debt to Equity	0.32	Dividend Yield	0.00%
Net Profit Margin	33.9%	Operating Profit Margin	56%

Luharuka Media & Infra is an NBFC with a key focus on inter-corporate loans, personal loans, loans against properties, loans against shares & securities, mortgage loans, auto/home loans, trade financing, bills discounting, and trading in shares & securities. 

It is a part of the Comfort Group, a business group of five companies started by Anil Agrawal in 1994. Luharuka Media & Infra obtained a Certificate of Registration from the Reserve Bank of India in the name of the company.

The company has high-profit margins. Its net profit margin and operating profit margin stood at 33.9% and 56% in FY22 respectively.

In the last five fiscal years, it has generated profits except for FY20. The stock has a low debt-to-equity ratio of 0.32 and trades at a lucrative price-to-book value of 1.69. 

Penny Stocks Under Rs 5 #4 – Seacoast Shipping Services

CMP	₹4.39	Market Cap (Cr.)	₹148
EPS	₹0.18	Stock P/E	12.4
ROCE	9.67%	ROE	5.50%
Face Value	₹1.0	Book Value	₹1.62
Promoter Holding	52.9%	Price to Book Value	2.73
Debt to Equity	0.44	Dividend Yield	0.00%
Net Profit Margin	2.0%	Operating Profit Margin	5.14%

Founded in 2005 as a freight forwarders and shipping agents company, Seacoast Shipping Services Limited (SCSSL) has grown to become one of the largest freight forwarders in Gujarat.

SCSSL is among the top 3 freight forwarders handling service of agri-commodities exports in containers from Mundra port. It has been working as an international ship operator of modern dry bulk vessels carrying around  5.0 million mt of bulk /and unitized cargo across the oceans.

The logistics company offers integrated freight forwarding services with transportation of containers & cargo for stuffing, phytosanitary service & customs house clearing services.

The stock presently trades at a P/E ratio of 12.4 offering the company a market capitalization of Rs 148 crore. The company reported earnings of Rs. 11 crore and Rs 3 crore in FY21 and FY22 respectively. 

Penny Stocks Under Rs 5 #5 – Godha Cabcon and Insulation

CMP	₹3.15	Market Cap (Cr.)	₹70
EPS	₹0.03	Stock P/E	98.5
ROCE	6.16%	ROE	3.31%
Face Value	₹1.0	Book Value	₹1.13
Promoter Holding	69.5%	Price to Book Value	2.8
Debt to Equity	0.06	Dividend Yield	0.00%
Net Profit Margin	2.3%	Operating Profit Margin	4.0%

Godha Cabcom and Insulation is a small-cap manufacturer of electronic cables and conductors. Its product portfolio covers all aluminum alloy conductors, steel-reinforced aluminum conductors, and armored & unarmoured cables.

The company traces its origins back to 1987 when an ACSR Conductor manufacturing unit at Dewas. The facility was moved to Indore and started again in 2006 after a break of 4 years. 

Godha Carbon has scaled its operations in the last three years increasing production capacity more than two times. It has also set up a manufacturing facility for XLP Coated wire, a new product with new technology in the wire industry.

The stock has a high promoter holding of 69.5% and a low debt-to-equity ratio of 0.16. It trades at a price-to-book value ratio of 2.80.

List of Penny Stocks Under Rs 5

Presented below is a table that lists the penny stocks under Rs 5.

Company Name	Industry	CMP (Rs. Cr.)	Market Cap (Rs. Cr)
Vertex Securities	Financial Services	2.48	18.4
Swasti Vinayaka Art & Heritage Corp	Ceramics	2.84	25.6
Luharuka Media & Infra	NBFC	2.62	24.6
Seacoast Shipping Services	Logistcs	4.39	148
Godha Cabcon and Insulation	Electric Equipment	3.15	70
Shree Global Tradefin	Iron and Steel	4.70	598
Viji Finance	NBFC	2.80	23

In Conclusion

Penny stocks are highly speculative in nature. They are risky because they lack liquidity. Their bid and ask spreads are usually large which brings a lot of volatility in their prices. Many penny stocks are prone to pump-and-dump strategies. 

However, if eyed right, some penny stocks indeed have the potential to generate multi-bagger returns. As an investor, which type of stocks do you prefer? How about we continue this conversation in the comments below?

You can now get the latest updates in the stock market on Trade Brains News and you can even use our Trade Brains Portal for fundamental analysis of your favorite stocks.

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Fundamental Analysis of IHCL – Financials, Future Plans & More

Fundamental Analysis of IHCL: The Taj Mahal Palace Hotel, Mumbai was India’s first five-star hotel with modern elevators and Russian carpets. It has stood there through the pre and post-independence period, and Mumbai 2008 terror attacks. The iconic building has been a symbol of India’s strength, resilience, and prosperity.

Did you know that it is owned by the Tatas? And the company (IHCL) that runs it, is listed! As an investor, wouldn’t it be an interesting activity to perform a fundamental analysis of IHCL?

Fundamental Analysis of IHCL

In this article, we shall perform a fundamental analysis of IHCL. We’ll start by getting ourselves acquainted with the history and business of the company, followed by an industry overview. Later, a few sections are devoted to revenue growth, return ratios, and debt analysis. A highlight of the future plans and a summary conclude the article at the end.

Without further ado, let us jump in.

Company Overview

The Indian Hotels Company Limited (IHCL) was incorporated in 1899 by Mr. Jamsetji Tata, the founder of the salt-to-software Tata Group. The company opened its first hotel in Bombay (now Mumbai) named The Taj Mahal Palace. Fast forward to the present date, IHCL is the largest hospitality enterprise in South Asia with Indian origins.

The company operates hotels, resorts, and homestays under its various brands: Taj, SeleQtions, Vivanta, Ginger, and amã Stays & Trails. It has an extensive portfolio of over 28,650 rooms in 240 hotels across different segments.

IHCL has a pan-Indian presence with international footprints in UAE, South Africa, Bhutan, Sri Lanka, Maldives, the US, and a few other countries. 

Source: IHCL Investor Presentation

IHCL also runs TajSATS, a joint venture with SATS, a Singaporean airport service company. TajSATS is India’s leading airline caterer with a 42% market share across 6 cities of India serving 88,000 meals every day.

In addition to hotels and air catering services, this Tata enterprise also operates 43 spas, 15 boutiques, 34 salons, and 380 restaurants and bars worldwide. Not only this, but the Tata company also runs a culinary & food delivery platform and an exclusive global business club ‘The Chambers’.

Having known about the history and business of IHCL, let us now move ahead to understand the hospitality industry landscape as part of our fundamental analysis of Indian Hotels Company Ltd.

Industry Overview

Indian hospitality and tourism industry continued its strong recovery after being severely affected by Covid-19-led restrictions in the last two years. According to Horwath HTL Market Report: India Hotel Market Review 2021, the calendar year 2021 saw occupancy of 43.5%. The figures were 32.0% in 2020 and 24.9% during the initial pandemic months of March to December 2020.

Lately, the occupancy levels peaked at 90% without international travel and low business travel. This recovery was large because of pent-up demand, domestic & leisure travel, extended stays, wedding, and social events.

The world has now adjusted to the ‘new normal. A higher vaccinated population, low mortality & quick recovery rate of the Omicron variant, and increased healthcare preparedness have kept the hospitality industry on track in India. 

According to the data from IBEF, the nation’s hotel market is projected to touch $52 billion by FY27 from $32 billion in FY20. Going forward, the rise in leisure travel, business travel, corporate events, weddings, and growing disposable income will lead the hospitality industry growth in India. 

IHCL – Financials

Revenue Growth & Profitability

Indian Hotels Company reported a loss of Rs. 265 crores in FY22 against Rs. 796 crores in FY21. Looking at the last two years’ results may give a very gloomy picture of the company.

However, a closer look tells us a lot has been happening at the iconic company recently.

Throughout the pandemic period, the management kept a strong focus on cost reduction. It has been on the track with debt reduction through fundraising and generating profits. 

Along with this, it continued with its expansion: organic and inorganic both. For instance, IHCL acquired the balance 40% stake in Ginger, an economy-hotels chain in April 2022 for Rs. 500 crores.

The table below highlights the quarterly revenue and net profit of IHCL for the last three quarters. The data clearly exhibits that the hospitality company is slowly turning into a highly profitable strong brand equity powerhouse with growing earnings.

Figures in Rs. Cr.	Dec’21	Mar’22	Jun’22
Revenue	1,111	872	1,266
Net Profit	96	72	181

In the next section of our fundamental analysis of Indian Hotels Company, we look at how it has reduced its debt over the years. 

Debt/Equity & Interest Coverage Ratio

Indian Hotels Company piled on debt in FY20 and FY21 as the company struggled with pandemic-led restrictions. However, its debt has come down over the last few quarters.

The management of IHCL has been particularly focused on cost reduction and making it a zero-debt company. This is in line with the other debt-free companies of the reputed and vast Tata Group.

The table below highlights how the debt-to-equity ratio increased in FY20 and FY21. It came down sharply in FY22 on an impressive note as the company paid back borrowings. Along present leverage level, the hospitality company also achieved net-debt-free status in FY22. 

Year	Debt/Equity	Interest Coverage
2022	0.28	1.31
2021	0.68	-1.51
2020	0.53	2.04
2019	0.40	3.08
2018	0.56	1.60

Return Ratios

Talking about the return ratios of Indian Hotels Company: return on capital employed (RoCE) and return on equity (RoE), they both got severely affected in FY21. However, the company reduced its losses in FY22 and posted better figures with RoCE turning positive in FY22 at 1.38%. 

Going forward, as the earnings increase and interest charges come down, the company is expected to deliver positive return ratios for its investors.

The table presents return ratios: RoE and RoCE, for the last five fiscal years.

Year	RoE (%)	RoCE (%)
2022	-3.50	1.38
2021	-19.73	-7.08
2020	8.13	7.23
2019	6.59	7.80
2018	2.41	1.26

Future Plans

So far we looked at only the previous years’ results of the company as part of our fundamental analysis of IHCL. In this section, we look at what lies ahead for the investors of the company.

1. As part of its ‘Ahavaan 2025’ vision, the company has planned to grow its hotels’ portfolio by 20% and homestays by a whopping 455% to 300 hotels and 500 homestays sites respectively by 2025.
2. As for the FY 2022-23 outlook, Indian Hotels has planned an inventory launch of 1,280 rooms in the present fiscal year.
3. IHCL’s new brands and initiatives include budget hospitality chain ‘Ginger’, food delivery platform ‘Qmin’, homestay chain ‘amã Stays & Trails’ and business club ‘The Chambers’. These contributed to 22% of the EBITDA in Q1FY23. In the future, new businesses share over traditional hotel business is expected to rise further and drive additional margin expansion.
4. When combined with management fees, together EBIDTA from new brands and mgmt. fees stood at 35% in Q1FY23. This highlights the management’s focus on diversifying IHCL’s operations from its core hotel business.

Fundamental Analysis of IHCL – Key Metrics

We are almost at the end of our fundamental analysis of IHCL. Let us take a quick look at the key metrics of the stock. 

CMP	₹344	Market Cap (Cr.)	₹50,000
EPS	₹1.38	Stock P/E	240
ROCE	1.38%	ROE	-3.5%
Face Value	₹1.00	Book Value	₹50
Promoter Holding	38.2%	Price to Book Value	6.91
Debt to Equity	0.28	Dividend Yield	0.12%
Net Profit Margin	-10.2%	Operating Profit Margin	13.2%

In Conclusion

Nearing the completion of our fundamental analysis of IHCL. we can conclude that the pandemic turned the hospitality industry upside down. IHCL also suffered considerable losses. However, it has emerged strong. Looking at the company, we can undeniably say that it is a powerful growth engine with strong brands as part of its portfolio.

Its ‘Ahvaan 2025’ strategy seems to be well consolidated in its present price giving a P/E ratio of 240. But it might be because of low trailing twelve months’ earnings. In your opinion, is IHCL at Rs. 344 a good buy? Or is it over-priced? In your opinion, what catalysts can make it more attractive? 

You can now get the latest updates in the stock market on Trade Brains News and you can even use our Trade Brains Portal for fundamental analysis of your favorite stocks.

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Top Stocks under Rs 10000 to add to your watchlist – Detailed Analysis

Top Stocks under Rs 10000: MRF is the most expensive stock trading on the Indian stock market. How we would wish if we’d bought its shares a couple of years ago? While we were buying smartphones for ₹ 10,000 in 2012, some people bought MRF’s shares. They’re holding more than eight times that money now. In other words, MRF has given multi-bagger returns of more than 800% over the years.

Rs 10,000 might seem to be a huge amount for many, especially if they have to invest all of it just to buy one share at a time. However, it might be possible that this investment may be like MRF. Maybe ten years later, we’ll tell ourselves that we hold one of the most expensive shares in the Indian stock market. The best part? We bought them for just ₹ 10,000.

In this article, we shall take a look at top stocks under Rs 10000. We’ll take a look at their business and do a quick analysis of these stocks. But, don’t forget to do a thorough fundamental analysis, if you’re willing to invest in any company. Let’s take a look!

Top stocks under Rs 10000 #1 – Bajaj Finance

Bajaj Finance is the lending arm of Bajaj Finserv Ltd which is a diversified NBFC (Non-Banking Financial Company) in India. It has a diversified lending portfolio across retail, SME, and commercial customers. The company caters to more than 50 million customers across the country. It accepts public as well as corporate deposits and offers a variety of financial services products to its customers.

Its peers include Bajaj Holdings & Investment, Cholamandalam Investment, and Finance Company, Muthoot Finance, Shriram Transport Finance Company, Aditya Birla Capital, and Mahindra & Mahindra Financial Services Ltd.

Revenue and Profitability

Year	Revenue (Rs. in Cr)	Net Profit (Rs. in Cr)
2018	12,785.86	2,496.37
2019	18,487.14	3,994.99
2020	26,373.77	5,263.75
2021	26,689.57	4,419.82
2022	31,658.98	7,028.23

Bajaj Finance’s revenue and profitability show an increasing trend. The company’s revenue grew at a 3-year CAGR of 19.64% and its profit at a 3-year CAGR of 20.72%. It has a good net profit margin of 22.20%.

Key Metrics

Particulars	Values	Particulars	Values
Face Value (₹)	2	ROE (%)	17.59
Market Cap (₹ in Cr)	4,26,891.18	Net Profit Margin	22.20
EPS (₹)	163.88	Current Ratio	0.42
Stock P/E (TTM)	43.03	Debt to Equity	3.81
Dividend Yield (%)	0.28	Promoter’s Holdings (%)	55.86

The company’s shares have a face value of ₹2 and they were available at ₹7,050 levels. The company has a market capitalization of ₹4,26,891.18 crores and is a large-cap company. It has an ideal return on equity of 17.59%. However, its shares are trading at a price-to-equity ratio of 43.03, which is higher than the sector P/E of 39.34. Moreover, its current ratio is 0.42, indicating that its current assets are lower than its current liabilities.

Bajaj Finance has a high debt-to-equity ratio of 3.81. However, NBFCs typically have higher debt, which can skew the debt-to-equity ratio. But, it is within the limits permitted by the Reserve Bank of India. It has a low dividend yield of 0.28. The company has a promoter’s holding of 55.86% and there is no pledge against it. FIIs hold a 17.07% stake, DIIs hold 15.59% and the public holds 11.48%.

Top stocks under Rs 10000 #2 – Tata Elxsi

Tata Elxsi is a Tata Group company, as the name suggests. It is amongst the world’s leading providers of design and technology services across industries. The company provides integrated services from research and strategy to electronics and mechanical design, software development, validation, and deployment. Further, it is supported by a network of design studios, global development centers, and offices worldwide.

Its peer companies are Tata Consultancy Services Ltd. Infosys, HCL Technologies, Wipro, Tech Mahindra, and Larsen & Toubro Infotech.

Year	Revenue (Rs. in Cr)	Net Profit (Rs. in Cr)
2018	1,386.30	240.04
2019	1,596.93	289.97
2020	1,609.86	256.10
2021	1,826.16	368.12
2022	2,470.80	549.67

Tata Elxsi’s revenue and profitability show an increasing trend. The company’s revenue grew at a 3-year CAGR of 24.39% and its profit at a 3-year CAGR of 37.68%. It has a good net profit margin of 22.24%.

Key Metrics

Particulars	Values	Particulars	Values
Face Value (₹)	10	ROE (%)	37.23
Market Cap (₹ in Cr)	43,344.71	Net Profit Margin	22.84
EPS (₹)	107.58	Current Ratio	4.13
Stock P/E (TTM)	64.7	Debt to Equity	0.00
Dividend Yield (%)	0.48	Promoter’s Holdings (%)	43.92

The company’s shares have a face value of ₹ 10 and they were available at ₹ 6960 levels. The company has a market capitalization of ₹ 43,344.71 crores and is a large-cap company. It has an excellent return on equity of 37.23%. However, its shares are trading at a price-to-equity ratio of 64.7, which is higher than the sector P/E of 39.56.

Moreover, it has a current ratio of 4.13 indicating that its current assets are four times higher than its current liabilities.

Tata Elxsi is debt free with a debt-to-equity ratio of 0.00. However, it has a low dividend yield of 0.48. The company has a promoter’s holding of 43.92% and there is no pledge against it. FIIs hold a 15.37% stake, DIIs hold 3.90% and the public holds 36.81%.

Top stocks under Rs 10000 #3 – Atul

Atul Ltd is a diversified and integrated Indian chemical company. It is a part of the Lalbhai Group, Gujarat. The company’s products are used in various Industries and are categorized under two segments: Life Science Chemicals and Performance and Other Chemicals under 9 Businesses.

Since its incorporation, the company has been a pioneer in many products in India. These include Dyes including Vat Dyes, crop care chemicals, Phosgene, Carbamite, 2,4-D Acid, para Cresol, and tissue culture-raised date palms.

Its peer companies are Pidilite Industries, Gujarat Fluorochemicals, Solar Industries India, Deepak Nitrite, Tata Chemicals, and Aarti Industries.

Revenue and Profitability

Year	Revenue (Rs. in Cr)	Net Profit (Rs. in Cr)
2018	3,295.77	277.01
2019	4,037.81	431.00
2020	4,093.06	665.93
2021	3,731.47	652.77
2022	5,080.89	596.58

Atul’s revenue and profitability show an increasing trend. The company’s revenue grew at a 3-year CAGR of 12.18% and its profit at a 3-year CAGR of 17.65%. It has a poor net profit margin of 11.59%.

Key Metrics

Particulars	Values	Particulars	Values
Face Value (₹)	10	ROE (%)	14.45
Market Cap (₹ in Cr)	24,603.7	Net Profit Margin	11.59
EPS (₹)	205.71	Current Ratio	2.4
Stock P/E (TTM)	40.53	Debt to Equity	0.03
Dividend Yield (%)	0.24	Promoter’s Holdings (%)	45.05

The company’s shares have a face value of ₹ 10 and their shares are available at ₹ 8,340 levels. The company has a market capitalization of ₹ 24,603.7 crores and is a mid-cap company. It has a return on equity of 14.45%.

However, its shares are trading at a price-to-equity ratio of 40.53, which is higher than the sector P/E of 31.44. Moreover, it has a current ratio of 2.4 indicating that its current assets are higher than its current liabilities.

Atul Ltd is almost debt-free with an ideal debt-to-equity ratio of 0.03. However, it has a low dividend yield of 0.24. The company has a promoter’s holding of 45.05%. It is important to note that there is a 1.5% pledge against their stake. Further, FIIs hold a 9.20% stake, DIIs hold 23.42% and the public holds 22.33%.

Top stocks under Rs 10000 #4 – Fine Organic Industries

Fine Organic Industries are the manufacturers, processors, suppliers, distributors, dealers, importers, and exporters of a wide range of oleochemical-based additives used in various industries. These include foods, plastics, cosmetics, coatings, and other specialty applications.

It is one of the largest manufacturers of oleo chemical-based niche additives in India. In fact, it is among the six largest global players in polymer additives and among the leading global players in specialty food emulsifiers.

Its peers include Pidilite Industries, Gujarat Fluorochemicals, Solar Industries India, Deepak Nitrite, Tata Chemicals, and Aarti Industries.

Revenue and Profitability

Year	Revenue (Rs. in Cr)	Net Profit (Rs. in Cr)
2018	855.81	95.33
2019	1,060.33	139.61
2020	1,038.08	169.86
2021	1,133.22	121.65
2022	1,876.26	260.74

Fine Organic Industries’ revenue and profitability show an increasing trend. The company’s revenue grew at a 3-year CAGR of 33.02% and its profit at a 3-year CAGR of 36.66%. It has a poor net profit margin of 13.89%.

Key Metrics

Particulars	Values	Particulars	Values
Face Value (₹)	5	ROE (%)	30.85
Market Cap (₹ in Cr)	18968.87	Net Profit Margin	13.89
EPS (₹)	174.9	Current Ratio	3.53
Stock P/E (TTM)	35.37	Debt to Equity	0.06
Dividend Yield (%)	0.22	Promoter’s Holdings (%)	75.00

The company’s shares have a face value of ₹ 5 and they were available at ₹ 6,190 levels. It has a market capitalization of ₹ 18,968.87 crores and is a mid-cap company.

It has a return on equity of 30.85%. However, its shares are trading at a price-to-equity ratio of 35.37, which is higher than the sector P/E of 36.00. Moreover, it has a current ratio of 3.53 indicating that its current assets are higher than its current liabilities.

Fine Organic Industries is almost debt-free with an ideal debt-to-equity ratio of 0.06. However, it has a low dividend yield of 0.22. On the bright side, the company has a high promoter’s holding of 75.00% and there is no pledge against their stake. Further, FIIs hold a 6.74% stake, DIIs hold 10.92% and the public holds 7.34%.

Top stocks under Rs 10000 #5 – Blue Dart Express

Blue Dart Express Limited is involved in the transportation and door-to-door distribution of time-sensitive shipments, through an integrated ground and air transportation network. The company is regarded as South Asia’s leading courier and integrated air express package distribution company. Delhivery Ltd and Elbee Services are their peers.

Revenue and Profitability

Year	Revenue (Rs. in Cr)	Net Profit (Rs. in Cr)
2018	2,799.24	144.71
2019	3,174.40	89.76
2020	3,175.13	-41.86
2021	3,288.13	101.81
2022	4,410.49	382.21

Blue Dart Express’ revenue and profitability show an increasing trend. The company’s revenue grew merely at a 3-year CAGR of 17.87% and its profit at a 3-year CAGR of 36.66%. It has a poor net profit margin of 13.78%. However, its NPM is higher than the historical 3Yrs NPM margin.

Key Metrics

Particulars	Values	Particulars	Values
Face Value (₹)	10	ROE (%)	52.23
Market Cap (₹ in Cr)	16,898.44	Net Profit Margin	8.67
EPS (₹)	199.27	Current Ratio	0.85
Stock P/E (TTM)	35.78	Debt to Equity	0.23
Dividend Yield (%)	0.88	Promoter’s Holdings (%)	75.00

The company’s shares have a face value of ₹ 10 and they were available at ₹ 7,000 levels. It has a market capitalization of ₹ 16898.44 crores and is a mid-cap company. It has a return on equity of 52.23%.

However, its shares are trading at a price-to-equity ratio of 35.78, which is lower than the sector P/E of 44.89, indicating that the stocks might be undervalued. However, it has a current ratio of 0.85 indicating that its current assets are lower than its current liabilities.

Blue Dart Express has an ideal debt-to-equity ratio of 0.23. However, it has a low dividend yield of 0.88. On the bright side, the company has a high promoter’s holding of 75.00% and there is no pledge against their stake. Further, FIIs hold a 5.13% stake, DIIs hold 7.90% and the public holds 11.97%.

In Closing

In this article, we saw top Stocks under rs 10000. We took a look at the businesses of Bajaj Finance, Tata Elxsi, Atul, Fine Organic Industries, and Blue Dart Express. Thereafter, we took a look at their revenue and profits. Finally, we took a look at key financial metrics. That’s all for this article folks. We hope to see you around and happy investing until next time!

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The post Top Stocks under Rs 10000 to add to your watchlist – Detailed Analysis appeared first on Trade Brains.

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