Diwali picks from analysts: Granules India
The BSE and NSE are conducting a special Muhurat trading session on Thursday, 19 October. The trading session, which is conducted to mark Diwali, is held between 6.30pm and 7.30pm. The pre-opening session will start at 6.15pm. In the leadup to this trading event, multiple analysts including Edelweiss, HDFC Securities, Axis Direct and Motilal Oswal have announced their Diwali picks. A summary of some popular picks is below. Granules India (HDFC Securities, Motilal Oswal), target price Rs. 200 - 240 Hyderabad-based pharmaceutical company Granules India is a company that analysts are bullish about due to the large number of ANDA approvals the company is filing for over the next couple of years. The company according to analysts is a strong performer, delivering earnings growth consistently over the past few years. It has also seen rising profitability on its products. Dilip Buildcon (Axis Direct, IIFL, Edelweiss) target price: Rs. 867 One of the largest and fastest growing EPC contractors for roads saw management raise the company's FY18 revenue guidance after a strong Q1 performance. Elections coming up in multiple states mean rapid clearance for road projects. The company is selling off its entire BOT portfolio, a move to reduce the debt on its balance sheet, giving DBL the chance to participate in HAM projects to the tune of Rs. 15,000 - 25,000 crore in FY18. The company's order backlog worth Rs. 15,600 crore at the end of Q1 gives it a long runway. Birla Corp (HDFC Securities, Motilal Oswal) target price: Rs. 1150 - Rs. 1450 Birla Corp, with its impressive cash flow yields and growing size, is another company that has drawn the attention of multiple analysts. The company's footprint across North, Central and East India bodes well for growth, with states in these regions looking to ramp up infrastructure spending. Birla Corp's scale currently is comparable to Ramco thanks to rapid growth in the past several quarters. Steel Strips Wheels (Axis Direct) target price: Rs. 1061 SSWL's investments in heavier wheels has been paying off for the firm in sales. In the most recent month, the company achieved total wheel rim sales of 72.92 lakh versus 12.09 lakh in September 2017, representing a growth of 7% YoY. The company has also recently expanded capacity in production lines to meet growing commercial demand in South India, and the firm also commenced production in its first alloy wheel plant in Gujarat in August 2017. EBITDA margins are projected to expand (analyst projections) by 1.5%+ thanks to investments in heavier wheels and alloy wheels. Rain Industries (Dolly Khanna pick) The final stock in the list is one where superstar investor Dolly Khanna has been increasing her stake. Khanna raised her stake in Rain Industries to 2.04% in the September quarter from 1.27% in the previous quarter. The carbon-products manufacturer saw mutual funds decrease their holdings in the company even as FII/FPIs and Dolly Khanna raised it for their portfolio investments.17-10-2017
