19th Apr 2019 | 12:04 PM IST

Free Share Market Tips Today: Stop & Read Before You Invest In Stocks

Various popular stock market news portals and TV channels discuss trending stocks and provide free share market tips based on technical charts and often without in-depth research. Our research desk analyses these trending stock market tips and provides their 360-degree analysis in a single place so you can avoid making wrong decisions with your hard earned money. Here are the share market tips for holding duration of around six months.

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Share Market Tips For 18th April 2019

Pidilite Industries. (NSE:PIDIND) (Share Price: Rs.1292): Potential Buy (10 Steps To Pick The Best Stocks)

Valuation: Over-Valued stock with TTM PE of 65x.

Reasons to consider: Pidilite is a dominant player in India’s adhesive market with a market share of 70% in its leading brand categories (Fevicol) in the organised segment. The company’s major segments, C&B (consumer & bazaar) product includes, Fevicol & M-seal and specialty industrial chemical recorded sales CAGR of 14%, 8% (standalone), respectively in FY11-18. The C&B segment growth came on the back of demand from the construction, repair & maintenance activities. Its robust 20% YoY topline growth was primarily driven by the C&B (consumer & bazaar) segment led by a significant improvement in demand and commendable scale-up of operations.

Drivers: According to the management there is some respite from falling prices of its major raw material which is VAM where prices below US$1000/tonne from the peak of US$1600/tonne. Thus, we believe the declining trend of VAM & stable rupee would help in recouping the operating margins to 21% in FY21E (18% currently). We maintain our positive stance on growth prospects considering it is the market leader in many consumer adhesive categories and command pricing power. Considering it is set to commence production of Monomethyl Hydrazene synthesis and continuous investments in capacity creations for plants, R&D facilities, Commercialization of new molecules will help PI in clocking 20% CAGR which gives us confidence and superior growth visibility for the next 2-3 years. Along with a strong balance sheet, healthy return ratios & efficient deployment of cash for inorganic expansion gives us comfort despite relatively rich valuation multiples.

Financial: Company had reported a Revenue of Rs 1848 cr in Q3FY19 Vs Rs 1543 cr in Q3FY18 up 19.8%, Net Profit declined by 8% to Rs 219 cr in Q3FY19 vs Rs 239 cr in Q3FY18, whereas EBITDA stands at Rs 337 cr in Q3FY19 vs Rs 370 cr in Q3FY18 down 9% and EBITDA margins were also down 578bps to 18.2% in Q3FY19 from 24% in Q3FY18.

UPL Ltd (NSE:UPL) (Share Price: Rs.932): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 24x.

Reasons to consider: UPL Limited provides crop protection solutions. The Company is engaged in the business of agrochemicals, industrial chemicals, chemical intermediates, and specialty chemicals. UPL solid 17.4% topline growth was driven by volume growth of 6% and a price hike of 7% YoY. Geographically, LatAM (+27%), Europe (+37%) and North America (+22%) which aided growth. EBITDA increased 22.6% YoY to Rs 1016 cr with the margin expanding 90bps YoY to 20.6% whereas PAT was flattish YoY at RS 634 cr.

Drivers: The company witnessed disappointing quarter primarily on account of erratic rainfall and poor Kharif yield in India which collectively resulted in stressed cash flows for farmers. However, company has continued its outperformance in the LatAM market (market growth in Brazil @ 18%) with 27% growth driven by Unizeb, Sperto and successful launch of a herbicide (branded as Strim). It has successfully closed the transaction of Arysta as on 31st Jan 2019. The company would be consolidating two months of Arysta’s financials in Q4FY19. Arysta’s revenue in CY18 stood at USD2b and EBITDA at USD450m. The company’s brand “Lifeline� continues to grow despite the increase in acreage of Dicamba-tolerant seeds. Rather, the company launched “Lifeline� in Canade and expects it to be significant in near future. UPL reported a revenue growth of 21.5% in North America to Rs 866 cr (22% contribution in Q3FY19) and revenue growth of 36.6% to Rs 511 cr in Europe (17% contribution in Q3FY19). However, UPL performance has been above par with the growth in Q3FY19 being driven by growth in Mancozeb and Sugarbeet herbicide.

Financial: Company had reported a Revenue of Rs 4921 cr in Q3FY19 Vs Rs 4194 cr in Q3FY18 up 17.4%, Net Profit remain flattish to Rs 634 cr in Q3FY19 vs Rs 632 cr in Q3FY18, whereas EBITDA stands at Rs 1016 cr in Q3FY19 vs Rs 829 cr in Q3FY18 up 22.6% and EBITDA margins were also up 90bps to 20.6% in Q3FY19 from 19.8% in Q3FY18.

Asian Paints Ltd (NSE:Asian Paints) (Share Price: Rs.1465): Potential Buy

Valuation: Over-Valued stock with TTM PE of 65x.

Reasons to consider: Asian Paints is the industry leader in the decorative paint segment with 53% market share and a dealer network of over 55,000 across India. It derives 89% of its top line from the decorative segment while the rest comes from the industrial segment. APL posted a robust performance with topline growth of 24% YoY since after FY11 led by strong growth in volume. Strong festive demand coupled with aggressive price hikes which helped the top line to grow double-digit in Q3FY19. In concall it has given a cautiously optimistic outlook as sales growth will remain sensitive to overall demand and elections with high raw material prices will aid to its margins downward despite a recent price hike in its products.

Drivers: Reduction in the GST rate from 28% to 18% would benefit organised players in the long run while rising tax compliance would hit the unorganised segment. With the expansion in paints capacity in Andhra Pradesh and Karnataka, APL is best placed to capture this additional demand, going ahead. It has witnessed a significant expansion in EBTIDA margin (by 400 bps in FY15-17) owing to lower raw material prices and rising proportion of premium products in the portfolio. However, a reversal was witnessed from FY18 onwards owing to the inability to pass on a sudden rise in crude based raw material prices. However, the management has indicated at a price hike at a regular interval in case of adverse movement of raw material prices to stable the margins. We believe the strong volume witnessed during the quarter factoring in structural demand given the lower per capita paint consumption in India with rising increase spending in infra and housing by the govt will give the boost to paint companies and APL will be the market leader will major benefit in this space.

Financial: Company had reported a Revenue of Rs 5294 cr in Q3FY19 Vs Rs 4260 cr in Q3FY18 up 24%, Net Profit improved 14% to Rs 647 cr in Q3FY19 vs Rs 567 cr in Q3FY18, whereas EBITDA stands at Rs 1043 cr in Q3FY19 vs Rs 891 cr in Q3FY18 up 17% and however, EBITDA margins declined due to increase in raw material prices down 122bps to 19.7% in Q3FY19 from 20.9% in Q3FY18.

Share Market Tips For April 2019: 2ndWeek

Varun Beverages Ltd. (NSE: VBL) (Share Price: Rs.852 ): Potential Buy

Valuation: Over-Valued stock with TTM PE of 53x.

Reasons to consider: VBL is the second largest Pepsico franchisee in the world (ex-US) for carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs). VBL manufactures and distributes PepsiCo products in the territories assigned through exclusive franchise agreement. It enjoys over 25 years of strategic association with PepsiCo and today accounts for 51% of PepsiCo’s beverage sales volume in India. Revenues witnessed growth of 49% to Rs 785 crore led by 40% volume growth in Q4. The company reported organic volume growth of 12.6% in the India business whereas it reported 9.8% on a consolidated basis during 2018. In Q4 EBITDA grew 46% YoY to 47.8 crore. Operating margins declined 119 bps to 19.7%. Net Loss during the quarter declined 2% to Rs 70.8 crore.

Drivers: VBL has expanded its operations in India through the acquisition of additional territories from PepsiCo in the last few years. On the rising health and wellness wave, india is witnessing a shift from the CSD to the NCB segment. To tap this opportunity, PepsiCo is focused on innovation and launch of new drinks in NCB space. In the recent past, it has launched Masala Nimbooz, Tropicana Fruitz, 7 Up Revive & Sting. The company plans to leverage on the Tropicana brand and launch more fruit juices. It has been continuously looking for newer territories to expand its base in untapped geographies and will remain a proxy play on soft drink industry in India. New territories & products give company an opportunity to expand volume & market share. Recently it has acquire franchisee rights of the beverage business of the foods and snacks major in southern and western India and with correction in the sugar price will also improve margins for the company in future.

Financial: Company had reported a Revenue of Rs 785 cr in Q4CY18 Vs Rs 527 cr in Q4FY17 up 3.4%, Net Loss declined by 2% to Rs 70.8 cr in Q4CY18 vs Rs 72.1 cr in Q4FY17, whereas EBITDA stands at Rs 47.7 cr in Q4CY18 vs Rs 32.6 cr in Q4FY17 up 46.6%. Currently, D/E ratio stood at 1.3x.

JK Lakshmi Cement Ltd (NSE: JKLAKSHMI) (Share Price : Rs.356): Potential Buy

Valuation: Over-Valued stock with TTM PE of 55x.

Reasons to consider: JK Lakshmi Cement Limited is a holding company. The Company is a manufacturer of cement. During Q3 company volumes increased 9% YoY to 2.31mt and realizations of Rs 4,056/t (+2% YoY). Revenue grew 12% YoY to Rs 935 cr and Net profit also grew 71% to Rs 14.8 cr YoY, whereas, power consumption improved to 69KWH/MT v/s 70KHW/MT in Q3FY18.

Key Drivers: Company has been witnessing several positive factors like sustained infrastructure spends in low cost housing, roads, pickup in private capex which will boost cement consumption. The northern region (where JK Cement sells 60% of volumes) is expected to witness limited capacity addition CAGR of 3.0% while demand is expected to grow 7-8% led by the above mentioned reasons. These factors would result in improved utilisations. Majority of the company’s capacity expansion is complete while only 0.8 MT grinding unit at Odisha yet to be commissioned. The grinding unit will cater to the coastal Odisha market where realizations are healthy. Furthermore, the addition of the grinding unit, its capacity will be 13.3 MT by Q4FY19 and with limited clinker capacity addition and improved demand in the northern region, we expect utilisation to firm up in coming years. Company has been taken various initiatives like cost control, captive power plant (20 MW) and conveyor belt at Durg along with softening prices of some key raw materials like petcoke are expected to drive margins in coming quarter.

Financial: Company had reported a Revenue of Rs 935 cr in Q3FY19 Vs Rs 837 cr in Q3FY18 up 11.8%, Net profit of Rs 14.8 cr in Q3FY19 vs Rs 8.6 cr in Q3FY18 up 71%, whereas EBITDA stands at Rs 98.3 cr in Q3FY19 vs Rs 94.3 cr in Q3FY18 up 4.2% and EBITDA margin down by 76bps to 10.5% in Q3FY19 vs 11.3% in Q3FY18.

Greenply Industries Ltd (NSE: GREENPLY) (Share Price: Rs.166): Potential Buy

Valuation: Over-Valued stock with TTM PE of 19x.

Reasons to consider: Greenply Industries Limited is an interior infrastructure company. The Company is engaged in the business of manufacturing plywood and allied products, medium density fiberboards (MDF) and allied products through its factories at various locations. Greenply Industries’ (GIL) topline grew 15.9% YoY to 462.9 crore on account of strong growth in plywood business and with government has set an aim to build 1.2cr houses by 2022 under PMAY, which would increase the demand for plywood industry for making doors and furniture.

Key Drivers: GIL’s plywood volumes grew 17.3% to 14.6 million square metre (MSM) in Q3FY19. This was on account of 22% volume growth in the premium plywood segment, leading the company to gain additional market share in this segment. Also, mid-segment plywood showed 9% volume growth during the quarter. MDF division revenues grew 7.7% YoY to 123.4 crore due to strong volume growth of 33.9% YoY to 58648 CBM in Q3FY19. Of the 58648 CBM sales volumes in Q3FY19, 32279 CBM came from Uttarakhand plant, while 26369 CBM was from AP plant. With most players, including GIL, taking price cuts in the MDF segment and with higher sales volume of the export component, MDF realizations fell 19.8% YoY to Rs 20960/CBM in Q3FY19. Its working capital days stretched by 11 days YoY to 87 days whereas, net D/E was at 0.77 in Q3FY18 against 0.69 in Q3FY18. But we remain positive on GIL as the share of organised plywood players (currently 30% of plywood market) is set to expand with GST rate cut, higher brand aspirations & GIL’s strong brand presence. Going ahead, the management also expects double digit growth in the plywood division in the next two to three years

Financial: Company had reported a Revenue of Rs 463 cr in Q3FY19 Vs Rs 339.3 cr in Q3FY18 up 15.9%, Net profit of Rs 35.7 cr in Q3FY19 vs Rs 36.1 cr in Q3FY18 down 1%, whereas EBITDA stands at Rs 58.3 cr in Q3FY19 vs Rs 62.7 cr in Q3FY18 down 6.9% and EBITDA margin down by 309bps to 12.6% in Q3FY19 vs 15.7% in Q3FY18.

Eicher Motors Ltd. (NSE: EICHERMOT) (Share Price: Rs.20980): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 28x.

Reasons to consider: Eicher Motors Limited is a parent of Royal Enfiled that offers middleweight motorcycles in India. Royal Enfield operates in India, and over 40 countries around the world. Company has been reporting subdued performance. Consolidated revenues for Q3FY19 were at 2,341 crore up 3.4% YoY. EBITDA came in at 680 crore down 5.4% YoY & EBITDA margins at 29.0% down 270 bps YoY with PAT in Q3FY19 was down 1.3% YoY to 533 crore.

Key Drivers: Royal Enfield motorcycles in the past year have witnessed multiple headwinds which includes increase in cost of ownership of 2-W due to increase in the insurance cost of 2W, loss of production due to labour strike at one of its plants near Chennai (28000 units). All this has leads to subdued demand for RE. Eicher motors is also a prominent player in the domestic CV space through its JV with Volvo. As on dec 2018, total sales volume at the CV unit has grown at 17% YoY to 58,000 units. Muted demand prospects at RE as well muted margin in the VECV business unit will impact earnings in near term. With recent change in management as Vinod K. Dasar appoints as CEO and post correction stock looks attractive on valuation front.

Financial: Company had reported a Revenue of Rs 2341 cr in Q3FY19 Vs Rs 2264 cr in Q3FY18 up 3.4%, Net profit of Rs 533 cr in Q3FY19 vs Rs 539 cr in Q3FY18 down 1.3%, whereas EBITDA stands at Rs 680 cr in Q3FY19 vs Rs 718 cr in Q3FY18 down 5.4% and EBITDA margin down by 270bps to 29% in Q3FY19 vs 31.7% in Q3FY18.

Share Market Tips For April 2019: 1st Week

BANDHAN BANK LTD (NSE: BANDHANBNK) (Share Price : Rs.549): Potential Buy

Valuation: Over-Valued stock with TTM P/BV of 6.5x.

Reasons to consider: Bandhan Bank Limited is a commercial bank, which offers a variety of asset and liability products and services designed for micro banking and general banking, as well as other banking products and services. Its asset products consist of retail loans including a substantial portfolio of micro loans, as well as micro, small and medium enterprise (SME) loans and small enterprise loans. Its liability products consist of savings accounts, current accounts and a variety of fixed deposit accounts. It is one of the latest entities to gain a universal bank licence. Bank has strong moats in its high-yielding MFI (micro finance institution) asset book, significantly lower opex vs peers, and notable delivery on liabilities within just 3.5 years of becoming a bank.

Key Drivers: Bandhan reported a healthy AUM growth of 46% YoY in Q3FY19, with robust growth in micro-banking 44% yoy and non-micro 64% yoy segments. Liability franchise has also witnessed significant improvement with CASA at 41% increase of 450 bps. Bandhan added 933K customers during Q3FY19 taking its total customer base to 15.3mn (79% micro-banking). NII growth in the quarter was robust 54% YoY as margin held up at 10.5% (+20bps QoQ). In addition, Bandhan bank also continues to maintain strong asset quality with GNPA’s and NNPA’s in the range of 1.6% and 0.6% respectively. We see the current AUM growth to continue with strong capital adequacy at 26.24% which also one of the highest in private sector banks. Also, the merger synergies with Gruh finance will playout expansionary role for Bandhan Bank in coming quarter. Post-merger, revised RoE of bandhan bank is expected to be sub 23% with RoA at 3.6% on an FY21E basis. Hence, we recommend to BUY the stock at dips.

Financial: Its annouces Q3 result where, Net interest income stood at Rs 1123 cr in Q3FY19 vs Rs 731 cr in Q3FY18. Net advances grew by 47% YoY to Rs 33873 cr. CASA grown by 420bps to 38.5% YoY. Net profit up 10% to Rs 331 cr Vs Rs 300 cr YoY. NIM up by 70bps to 10.3% YoY.

Asian Quess Corp Ltd (NSE: QUESS) (Share Price : Rs.715): Potential Buy

Valuation: Over-Valued stock with TTM PE of 40x.

Reasons to consider: Quess Corp Limited is India’s leading business services provider. It offers the services to four service lines, people and services, global technology solution, integrated facility management and industrial. It derives majority of the revenue from people and services line of business. Services such as skill development, general staffing, payroll and recruitment process outsourcing are included, whereas Global technology solution include IT staffing, IT product and solution. Quess has a team of over 292,872 employees across India, North America, South America, South East Asia and the Middle East across segments such as Industrials, Facility Management, People Services, Technology Solutions and Internet Business. It serves over 1,900+ clients worldwide. Quess Corp is a step-down subsidiary of Fairfax Financial Holdings Group held through its Indian listed subsidiary, Thomas Cook India Limited.

Key Drivers: Company has shown a growth of more than 30% across the segment except the facility management business where the growth was 20% and management is optimistic about the contribution of People Services and Facility Management business that have shown healthy sequential margin expansions of 16 bps and 8 bps respectively. In today's era, corporates are outsourcing non-core activities to professional service providers like Quess corp & increased acceptance of outsourcing non-core activities and sustained commercial/office space absorption have been significant growth drivers for facility management services in India like Quess corp where due to this they will be benefiting in coming years. In India, every month 1 million people are entering the workforce, generating sustainable employment becomes an imperative which opens huge growth opportunities for Quess and will give opportunity to play on the people management & staffing service company. Based on the management optimistic outlook for future and given the stock has corrected more than 40% from 52-wk high will give good opportunity to buy the stock and investor can add at this level and on dips.

Financial: Company performance in Q3, Total Revenue was Rs 2172 cr in Q3FY19 vs Rs 1584 cr in Q3FY18 up 37%. Net Profit was Rs 64 cr in Q3FY19 vs Rs 61 cr in Q3FY18 up 5% while Ebitda was Rs 118 cr in Q3FY19 vs Rs 91 cr in Q3FY18 up 30% and Ebitda margins were 5.45% in Q3FY19 compare to 5.74% in Q3FY18 down 29 bps. In this quarter EPS was seen at Rs 4.36 compare to Rs 4.17 in same quarter previous year up 5%.

Bajaj Finance Ltd. (NSE: BAJFINANCE) (Share Price: Rs.3047): Potential Buy

Valuation: Over-Valued stock with TTM P/BV of 9.8x.

Reasons to consider: Bajaj Finance Limited (BFL) is a non-banking finance company (NBFC). It is one of the largest retail asset financing company. The Company is engaged in lending and allied activities. It focuses on consumer lending, small and medium-sized enterprises (SME) lending, commercial lending, rural lending, fixed deposits and value-added services. Its consumer lending products include two-wheelers and three-wheelers finance, consumer durables finance, digital products finance, retailer finance, salaried personal loans, e-commerce consumer finance, e-commerce seller finance and home loan. Its SME lending products include loan against property and business loans. Its commercial lending products include loan against securities and financial institutions group lending business.

Key Drivers: Company has posted robust performance in a tough environment. It has seen robust loan growth during Q3, where its assets book grew strong 41 percent YoY to Rs 109,930 crore. Loan growth was contributed mainly by consumer lending and mortgages. The growth in securities lending was muted while robust growth in rural lending continued. Management has always guided a loan growth rate of 20-25 percent but it has been consistently beating the guidance. Despite the cost of funds moving up, BFL’s margins improved in Q3. BFL always traded at premium valuations due to its higher earnings growth trajectory. Currently, BFL stock is trading at FY20 estimated P/B ratio of 6.3 which is significant premium to its peers. One should look out for any price correction as an opportunity to buy into the stock.

Financial: Its annouces Q3 result where, Net interest income stood at Rs 3201 cr in Q3FY19 vs Rs 2192 cr in Q3FY18. Whereas, AUM grews to Rs 109930 cr in Q3FY19 up 40.9% vs Rs 78033 cr in Q3FY18 YoY with Steady asset quality. Net profit up 53.6% to Rs 1060 cr Vs Rs 690 cr YoY and NIM stood at 11.3% YoY.

Tata Motors Ltd (NSE: TATAMOTORS)(Share Price : Rs.185): Potential Buy

Valuation: Under-Valued stock with negative earnings.

Reasons to avoid: Tata Motors Limited is an automobile company. Tata Motors owns iconic brands Jaguar and Land Rover, while offering a broad product line of all types of commercial and passenger vehicles, sports utility vehicles, luxury passenger, large semi-trucks. Companys hold 45% of market share of commercial vehicle in india. Auto sector has faced the slowdown in india market where the inventory pile-up at dealers location was high in second half due to low demand, liquidity stress and higher fuel prices but TML has been an outperformer compare to its peers and gaining market share in domestic passenger and commercial vehicle segment where market share in CV was up 60 bps while PV was up 50 bps.

Key Drivers: TML Outperform the peers and gained the market share in domestic market. Company (PV) segment continues to outperform the industry with the new products driving the growth and Continued strong profitability in CV, EBITDA stable despite challenging market conditions are positive. In the domestic market M&HCV trucks de-grew 15%, ILCV trucks +8%, SCV & Pick Ups +15% and CV Passenger -16%. PV was up 3% with new products continuing to gain strong traction in the market. In fiscal year 2019 so far has been a challenging period for the industry. Despite the muted growth, Tata Motors has delivered strong results, registered an impressive profitable growth this year on the back of exciting products, renewed brand positioning and aggressive cost reduction. TML numbers has been good on standlone basis by gaining market share in domestic market. Considering the china slowdown, drop in JLR sales and the highest ever quarterly loss posted by TML due to one time asset impairment the stock has already corrected substantially from 52-wk high. But gaining market share in domestic market is positive sign and given the stock price already factored the china slowdown and weak JLR sales number. Currently stock looks attractive at these price.

Financial: Total Revenue was Rs 77,001 cr in Q3FY19 vs Rs 73,366 cr in Q3FY18 up 5%. Net Profit was Rs(26,993) cr in Q3FY19 vs Rs 1199 cr in Q3FY18 while Ebitda was Rs 6,545 cr in Q3FY19 vs Rs 7,924 cr in Q3FY18 down 18% and Ebitda margins were 8.5% in Q3FY19 compare to 10.8% in Q3FY18 down 230bps. As there was an loss in this quarter EPS will not be comparable.

Share Market Tips For March 2019: 5th Week

POWERGRID (NSE: POWERGRID) (Share Price : Rs.197.50): Potential Buy (10 Steps To Pick The Best Stocks)

Valuation: Fairly-Valued stock with TTM PE of 12x.

Reasons to consider: Power Grid Corporation of India Limited is a transmission company engaged in the power transmission business with responsibility for planning, implementation, operation and maintenance of Inter-State Transmission System and operation of National and Regional Load Dispatch Centers. The Company's segments include Transmission, Telecom and Consultancy. Currently, company standalone capitalization stood at Rs 127b in 9MFY19 (Rs 68.6b in Q3), as against Rs 195b in 9MFY18. The company also capitalized Rs 39b of TBCB projects during the year. Telecom revenue/EBIT increased 13%/38% YoY to Rs 2.0b/Rs 1.1b in Q3FY19. Consultancy revenue increased 9% YoY to Rs 1.6b, but EBIT declined 15% YoY to Rs 0.7b in Q3FY19.

Key Drivers: Management highlighted that the government has envisaged transmission projects of Rs 433b. Of these, Rs 160b are to be bid out in the next one year. Considering with all these receivables have nearly doubled in nine months to Rs 70.6b as beneficiaries are delaying payments. Whereas, rising capitalisation of TBCB projects and higher share of the same in the upcoming projects will lead to a decline in the return profile of the company. At CMP, the stock trades at 1.5x FY20E P/BV for RoE of 16% and CoE of 10-11%. One can buy stock at current levels.

Financial: The company had reported a Revenue of Rs 8472 cr in Q3FY19 Vs Rs 7507 cr in Q3FY18 up 12.8%, Net profit of Rs 2331 cr in Q3FY19 vs Rs 2032 cr in Q3FY18 up 14.7%, whereas EBITDA stands at Rs 7988 cr in Q3FY19 vs Rs 6914 cr in Q3FY18 up 15% and EBITDA margin up 219bps to 94.3% in Q3FY19 vs 92.1% in Q3FY18.

TCS Ltd. (NSE: TCS) (Share Price : Rs.1960): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 25x.

Reasons to consider: Tata Consultancy Services Limited (TCS) is engaged in providing information technology (IT) services, digital and business solutions. The Company's segments include banking, finance and insurance services (BFSI); manufacturing; retail and consumer packaged goods (CPG); telecom, media and entertainment, and others, such as energy, resources and utilities, hi-tech, life science and healthcare, s-Governance, travel, transportation and hospitality, and other products. It has reported stable revenue growth of 20.3% yoy and 1.3% qoq in Q3FY19. This was largely led by strong revenue growth from digital services vertical and BFSI segment for the quarter. However, the EBIT for the quarter remain subdued due to higher employee benefit expenses. The EBIT margin for the quarter stood at 25.6% with contraction of 90 bps. The bottom-line showed sturdy performance with 2.6 % qoq to Rs.9560 crore. In addition company won deals Rs.590 crore in the quarter spread across different segment and geographies.

Key Drivers: The digital and BFSI segment continue to remain major revenue contributors for the company with 30% revenue contribution each. The retail segment ( 16.5% of revenue) also reported robust growth in the quarter and hold huge potential of growth. Going ahead we see robust deal wins and strong growth across the verticals will aid to double digit growth in FY19 & FY20E. However, the slowdown in global economy remain key risks to look out for. one can buy the stock in correction.

Financial: Company had reported a Revenue of Rs 37338 cr in Q3FY19 Vs Rs 30904 cr in Q3FY18 up 20.8%, Net profit of Rs 8105 cr in Q3FY19 vs Rs 6531 cr in Q3FY18 up 24%, whereas EBITDA stands at Rs 10083 cr in Q3FY19 vs Rs 8288 cr in Q3FY18 up 21% and EBITDA margin up 19bps to 27% in Q3FY19 vs 26.8% in Q3FY18.

HDFC BANK Ltd. (NSE: HDFC BANK) (Share Price : Rs.2280): Potential Buy

Valuation: Over-Valued stock with TTM P/BV of 5.85x.

Reasons to consider: HDFC Bank Limited is India's largest private sector bank. The Bank offers a range of banking services covering commercial and investment banking on the wholesale side and transactional/branch banking on the retail side. It also offers financial services. The Bank's segments include Treasury, Retail banking, Wholesale banking and Other banking business. HDFC Bank PAT growth has been consistent at 20% since FY16 vs. 30% in the past and grew to Rs 17457 crore in FY18. In Q3FY19, 54% was retail (Rs 420900 crore) & 46% corporate book of Rs 360051 crore. In Q3FY19, personal loans & credit cards continued their strong growth trajectory. It enjoys the largest market share in credit cards, which fetches higher margins and returns.

Key Drivers: The bank is well placed to harness both retail & expected corporate pick-up. The bank has a strong liability franchise with CASA of 48% and retail term deposit comprises more than 80% of deposit of Rs 788770 crore as on FY18. Compare to others banks, it has maintained stable asset quality where its GNPA’s & NNPA’s remain in range of 1-1.5% from past 20 quarters. Considering, the healthy balance sheet growth, superior asset quality & management, the bank is well poised to deliver consistently with superior margin & robust return ratios. However, the bank has always trades with premium valuation. One can buy the stock at correction.

Financial: Its annouces Q3 result where, Net interest income stood at Rs 12576 cr in Q3FY19 vs Rs 10314 cr in Q3FY18. Net advances grew by 24% YoY to Rs 780951 cr. CASA de-grown by 320bps to 40.7% YoY. Net profit up 20% to Rs 5585 cr Vs Rs 4642 cr YoY. NIM remain stable at 4.3% YoY.


Valuation: Fairly-Valued stock with TTM PE of 35x.

Reasons to avoid: The Phoenix Mills Limited is an India-based company engaged in the construction of buildings carried out on own-account basis or on a fee or contract basis. The Company is engaged in the development and operation of malls and other real estate properties. It operates mainly in two segments: Property & Related Services, and Hospitality Services. Sailing on its retail-led mixed-use development model, the company has an operational asset portfolio of eight operational retail assets aggregating 5.9 million square feet (msf) and four operational commercial assets aggregating 1.16 million square feet.

Key Drivers: Focusing on completing its existing/upcoming projects by FY22/23 and de-leveraging its balance sheet will be a key driver for growth. The company plans to almost double its retail portfolio and triple its commercial asset portfolio. Phoenix has two under construction assets at Pune, Chennai with GLA of 1.12 msf and plans to develop commercial asset at PMC Hebbal with GLA of 0.65 msf. Once it is operational these expansions would augment PML's commercial portfolio to around 3 msf in next three to four years. Phoenix Mills Ltd provides a unique way to play India’s real-estate & retail growth story. It will be the prefer bet in real-estate sector due to its strong operational performance,scalability (through the CPPIB deal),robust cash generation and no issue in corporate governance. We will be positive on stock considering the decent valuation one can add the stock on dips

Financial: Total revenue Rs 440.4 cr in Q3FY19 vs Rs 416.6 cr in Q3FY18 up 6%. Net Profit at Rs. 70.8 cr in Q3FY19 vs Rs 65.2 cr in Q3FY18 up 9%. Ebitda stands at Rs.222.5 cr in Q3FY19 up 8% vs Rs. 206.7 cr in Q3FY18. PML Diluted EPS has increased to Rs. 4.61 in Q3FY19 vs Rs. 4.25 in Q3FY18 and Ebitda margins were 51% in Q3FY19 vs 50% in Q3FY18 up 2%.

Share Market Tips For March 2019: 4th Week

ITC Ltd. (NSE: ITC) (Share Price: Rs.296): Potential Buy (10 Steps To Pick The Best Stocks)

Valuation: Fairly-Valued stock with TTM PE of 31x.

Reasons to consider: ITC Limited is a holding company, which is engaged in the marketing of fast moving consumer goods (FMCG). The Company operates through four segments: FMCG, Hotels, Paperboards, Paper and Packaging, and Agri Business. ITC reported a steady quarter with broad-based growth across segments. Cigarette volumes grew a healthy 7.5% with 8.8% EBIT growth as stable prices propelled steady increase in consumer demand. FMCG business reported 41.6% higher EBIDTA led by strong traction in processed foods and lower losses in personal care despite one off losses on business restructuring in Lifestyle retailing. Paperboard business is in fine fettle given gains from steady prices and benign input costs.

Drivers: ITC’s vision of reaching Rs 100,000 crore turnover with FMCG contributing Rs 70,000 crore is on the right track with company’s slew of new launches recently. It has forayed into packaged non-basmati rice market with Sona Masoori in Bengaluru. In the dairy segment, it has launched four variants of RTD milk beverages under Sunfeast Wonderz brand in Karnataka and Tamil Nadu. ITC is looking to expand its dairy business further by launching paneer in Kolkata and milk beverages on a pan India level in the near term. It has launched pouch milk under Aashirvaad Swasti and curd under Aashirvaad Swasti Dahi. It expanded its noodle portfolio by launching Sunfeast Yippee noodles in four new variants and launched its traditional flavours snack Tedhe Medhe Wakhra Style under Bingo brand.

Financial: The company had reported a Sales of Rs 11227 cr in Q3FY19 Vs Rs 9772 cr in Q3FY18 up 15%, Net profit of Rs 3210 cr in Q3FY19 vs Rs 3090 cr in Q3FY18 up 4%, whereas EBITDA stands at Rs 4325 cr in Q3FY19 vs Rs 3889 cr in Q3FY18 up 11% and EBITDA margin has contracted 654bps to 38.5% in Q3FY19 vs 45.1% in Q3FY18.

Cyient Ltd. (NSE: CYIENT) (Share Price: Rs.660) (Share Market tips): Potential Buy

Valuation: Under-Valued stock with TTM PE of 18x.

Reasons to consider: Cyient delivered weak performance in Q3FY19 on revenue front while margin expansion was a positive. Revenue was at USD 165.1mn was down 2.2% QoQ, (-1.5%) in CC(constant currency). Services (88% of rev, -0.2% QoQ CC) growth was below expectation while DLM (12% of rev, -10.3% QoQ) fall was less than expected. Aerospace & Defence (34.3% of rev, +0.5% QoQ) has been stable in a seasonally weak quarter. EBITDA Margin was up 103bps QoQ to 14.7%, led by margin expansion in Services (16.3%,+100bps QoQ) and DLM (4%, +30bps QoQ). Going forward, we expect revenue growth to be driven by ramp up in postponed deal in communication segment, acceleration in Aerospace & Defence (mainly led by higher spend from military and healthy spends in avionics & MRO) and improvement in semiconductor & utility space.

Drivers: The company will continue to make investments in Platforms & IPs which will aid future growth. We expect growth to come from Acceleration in Aerospace & Defence, Ramp-up in DLM and Recovery in Communication led by new order wins. Cyient’s Q3FY19 margins have improved 100 bps on the back of cost efficiency and rupee depreciation. Company is expected to witness healthy growth in the coming quarters mainly led by improved growth in communication and aerospace segment.

Financial: Revenue at Rs 1188 crore in Q3FY19 vs Rs. 983 crore in Q3FY18 up 20%. Net Profit at Rs. 92 crore in Q3FY19 vs Rs. 109 crore in Q3FY18 down 15.3% whereas, EBITDA stands at Rs. 175 crore in Q3FY19 vs Rs. 143 crore in Q3FY18 up 22% and EBITDA Margins at 14.78% in Q3FY19 up 18bps from 14.60% in Q3FY18.

Just Dial Ltd. (NSE: JUSTDIAL) (Share Price : Rs.612.50): Avoid

Valuation: Fairly-Valued stock with TTM PE of 22x.

Reasons to avoid: JD could be under-investing in A&P (Advertising and Promotion) in contrast to the aggressive cash-burns by most of domain-specific apps. Due to this it will effect on its product/service categories where it is used by their consumers and that affecting the extant paid-client base. We believe in coming quarter earnings revision cycle will likely to be weak as revenue growth will remains muted. Furthermore, major risk in long-term for JD’s revenues/business model remains the growing generic search capabilities of Google + direct web-presence by medium/small enterprises with the falling costs of setting up websites. Thus, given the Q3 performance and the recent buy-back from the company are already priced-in the stock. One can avoid the stock and sell at higher levels.

Financial: On the financial front in Q3FY19 Net Sales was Rs 226.78 crore vs Rs. 196.79 crore in Q3FY18 up 15.24%. Net Profit at Rs. 57.34 crore in Q3FY19 vs Rs. 28.60 crore in Q3FY18 up 100.49%. Whereas, EBITDA stands at Rs. 89.29 crore in December 2018 up up 81.74% from Rs. Rs. 49.13 crore in December 2017.

Dish TV India Ltd. (NSE: DISHTV) (Share Price : Rs.40): Avoid

Valuation: Fairly-Valued stock with TTM PE of 22x.

Reasons to avoid: Company has posted good number in Q3 but it is un-comparable due to its merger with videocon d2h. The main threat to company is Jio, which had announced plans to enter the cable broadband and IPTV space, strengthened its distribution reach by acquiring a majority stake in two of the MSOs Hathway Cable and Network. The deal gave Jio access to 24 million households and 27000 LCOs. We believe this is a major breakthrough for last mile connectivity and that will effect on the ARPU's of the dish tv and shift in subscriber base. With, high promoter pledge (84% of promoters’ stake is pledged) is also a cause of concern as we have already seen recent carnage in the stock due to this.

Financial: On the financial front in Q3FY19 Net Sales was Rs 1517.45 crore vs Rs. 740.77 crore in Q3FY18 up 104.85%. Net Profit at Rs. 161.66 crore in Q3FY19 vs Rs 3.58 crore in Q3FY18 up 4615.64%. Whereas, EBITDA stands at Rs. 529.71 crore in December 2018 up 144.87% from Rs. 216.32 crore in December 2017. The numbers have been un-comparable due to merger with Videocon d2h.

Share Market Tips For March 2019: 3rd Week

Jubilant Foodworks Ltd. (NSE: JUBLFOOD) (Share Price : Rs.1332): Avoid (10 Steps To Pick The Best Stocks)

Valuation: Overvalued valued stock with TTM PE of 56x.

Reasons to avoid: Company has delivered strong Same Store Sales growth (SSSG) of 14.6% in Q3FY19 with dunkin’s becoming profitable in this quarter which has supported margins in the overall business. Domino's market share in Pizza is likely to be remain at 70%. But recent announcement of the management of Jubilant Group to charge 0.25% royalty on “Jubilant� brand from FY20 which have dampened its corporate governance issue. Nevertheless, it has reversed its decision of royalty payment after facing severe criticism from analyst community but still it will have negative impact on the stock in near term. Considering all the positive factor has discounted in the stock at these level with TTM PE 56x which is quite expensive and with recent launch of Hong's Kitchen (Chinese cuisine segment) it will also put pressure on margins in near term. So, one can avoid a stock at these levels.

Financial: On the financial front in Q3FY19 Net Sales was Rs 929.05 crore Vs Rs. 795.17 crore in Q3FY18 up 16.84%. Net Profit at Rs. 96.51 crore in Q3FY19 vs Rs. 66.02 crore in Q3FY18 up 46.17%. Whereas, EBITDA stands at Rs. 184.38 crore in December 2018 up 31.5% from Rs. 140.21 crore in December 2017.

NTPC Ltd (NSE: NTPC) (Share Price : Rs.148.50): Potential Buy

Valuation: Under-Valued stock with TTM PE of 12x.

Reasons to consider: NTPC reported Q3 numbers wherein revenues came at Rs 24120.4 crore in Q3FY19 vs Rs 20774 crore in Q3FY18. On an operational basis, gross power generation grew 3.4% at 70 (BUs) Q3FY19 vs 67.7 (BUs) Q3FY18. Whereas, energy sold grew 3.1% YoY to 65.3 (BUs) Q3FY19 vs 63.4 (BUs) Q3FY18. PLFs of coal plants were at 77.7% vs 76.9% in Q3FY18. As on 9MFY19, the company’s commercial capacity was at 44185 MW. Average tariff for 9MFY19 was at Rs 3.47 / Kwhr. Fuel cost per unit during Q3FY19 was at Rs 2.17 / unit vs Rs 2.04 / unit QoQ.

Key Drivers: Management in concall stated in the coming quarter the under-recovery figure will improve as losses from its Unchahar plant will now be contained and the plant has re-started its operations from Dec 2018. It currently has 21,071MW under construction power project out of which it plans to capitalize 4-5GW of capacity each year for the next 4 years which will lead to strong growth in its regulated equity base. NTPC is also planning to add around 10GW of solar capacity in next 3 years.

Financial: In Q3FY19 Net Sales was Rs 24120.4 crore Vs Rs. 20774 crore in Q3FY18 up 16%. Net Profit at Rs. 2385 crore in Q3FY19 up 1% from Rs. 2361.7 crore in Q3FY18, whereas EBITDA stands at Rs. 6580 crore in Q3FY19 vs Rs. 5277 crore in Q3FY18 up 25%.

Mahanagar Gas Ltd. (NSE: MGL) (Share Price : Rs.897): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 17x.

Reasons to consider: Mahanagar Gas Ltd. (MGL) reported revenues of Rs 752 crore in Q3FY19 and volume growth at 8% YoY for Q3FY19. Whereas, CNG segment grew at 8%YoY, while total PNG growth stood at 7% YoY . Within PNG, domestic volume grew at 13% YoY. After EBITDA/scm of Rs 8.1 in 6MFY19, the same grew to Rs 8.8 in the quarter.

Key Drivers: With MGL’s fundamental growth story in place and a positive sectoral outlook, the company can deliver a strong performance with govt’s continued focus towards the use of cleaner fuels. The Discounted prices of CNG as compared to alternative fuels (petrol, diesel) makes it preferable. And thereby expected to aid the conversions to CNG. Further, to address the lower penetration, management has putting efforts and aiming to accelerate it with recent critical approvals for Raigad regions. Moreover, MGL's revised CapEx guidance to Rs 375 crore suggests its optimistic plans towards penetrating aggressively in tier 1 & tier 2 cities.

Financial: Net sales of Rs 752.68 crore in Q3FY19 vs Rs. 581.41 crore in Q3FY18 up 29.46% YoY. Net Profit at Rs. 148.32 crore in Q3FY19 vs Rs. 123.98 crore in Q3FY18 up 19.63% YoY whereas, EBITDA stands at Rs. 259.48 crore in Q3FY19 vs Rs. 215.03 crore in Q3FY18 up 20.67% YoY.

Bata India Ltd. (NSE: BATAINDIA) (Share Price : Rs.1340): Potential Buy

Valuation: Over-valued stock with TTM PE of 58x

Reasons to consider: Bata India Ltd had posted a strong performance in the December quarter with revenues growing 15.5 percent to Rs 778.7 crore YoY and net profit higher by 51.3 percent to Rs 103.2 crore YoY. It has reported double digit revenue growth with Same Store Sales Growth(SSSG) grew 12% for the quarter and margins for the quarter improved significantly by 350 bps to 58.6% YoY.

Key Drivers: Company efforts towards premiumisation of product portfolio yielded better operating margins and will remain better in coming quarter. It has concentrated on redesigning of its existing store model with specific focus on various categories like sports, youth and women which will drive the growth in coming quarter. Management has a plan to add 150 stores in FY19 (100: COCO, 50: franchisee)

Financial: In Q3FY19 Net Sales was Rs 779 crore Vs Rs. 674 crore in Q3FY18 up 15.5%. Net Profit at Rs. 103 crore in Q3FY19 up 51.3% from Rs. 68 crore in Q3FY18, whereas EBITDA stands at Rs. 163.6 crore in Q3FY19 vs Rs. 111.5 crore in Q3FY18 up 46.8% & EBITDA Margins at 21% in Q3FY19 vs 16.5% in Q3FY18 up 447bps.

Share Market Tips For March 2019: 2nd Week

Hindustan Unilever Ltd. (NSE: HINDUNILVR) (Share Price: Rs.1700): Potential Buy

Valuation:Overvalued stock with TTM PE of 62x.

Reasons to consider: Hindustan Unilever (HUL) reported robust set of numbers with revenue growth of 11.3% YoY on the back of 10% volume growth. The strong volume growth has been mainly on account of healthy growth witnessed across all segments with addition of new launches which gaining traction. Home care (33% of revenue), personal care (47% of revenue) and foods & refreshments segments (18% of revenue) grew 14.8%, 11% and 9.9%, respectively. Due to healthy sales growth and strong margins, net profit for the quarter grew 8.9% YoY to 1444 crore

Drivers: HUL continued its focus on innovations in Q3FY19 with the launch of RS 10 packs in a number of beauty and personal care products and the relaunched of Lifebuoy & Dove. In the foods & refreshments segment, HUL launched Magnum Hazelnut in select markets. The company is now premiumising its range of water purifiers as demand is shifting towards RO, UV and is planning to gradually phase out its gravity segment water purifiers. On top of all the HUL-GSKCH merger would bring in significant synergy benefits to the company going forward. On the herbal space product (HUL) would be able to deliver superior growth as it has embarked Ayush brand in the mass segment across categories like toothpaste, facewash, shampoo, conditioner, etc.

Financial: In Q3FY19 Net Sales was Rs 9558 crore Vs Rs. 8590 crore in Q3FY18 up 11.3%. Net Profit at Rs. 1444 crore in Q3FY19 up 8.9% from Rs. 1326 crore in Q3FY18, whereas EBITDA stands at Rs. 2046 crore in Q3FY19 vs Rs. 1680 crore in Q3FY18 up 21.8% & EBITDA Margins at 21.4% in Q3FY19 vs 19.6% in Q3FY18 up 185bps.

Relaxo Footwears Ltd. (NSE: RELAXO) (Share Price: Rs. 755.75): Potential Buy

Valuation: Overvalued valued stock with TTM PE of 52x.

Reasons to consider: Relaxo’s Q3FY19 revenues jumped 20.6% YoY to Rs 551 crore. Due to strong volume growth we have seen 20% increased in revenue during the quarter. For the seventh consecutive quarter, Relaxo has reported double digit volume growth. The company continues to witness better growth compared to its peers. Management focusing on addition of new stores with increasing distribution reach and premiumization will benefit to gain a market share in coming quarter but also put pressure on the margins in near term.

Key Drivers: Management remains optimistic about the growth in domestic footwear industry and believe that the structural reforms like GST would help the organized sector to grow in the coming quarters. Due to implementation of GST, organized sector would continue to outperform and Relaxo being a market leader in the economy category will be the key driver for the stock. The contribution of mid category would grow for the company, going ahead (15% to 20%).

Financials: In Q3FY19 Net Sales was Rs 551 crore Vs Rs. 457 crore in Q3FY18 up 20.6%. Net Profit at Rs. 35.6 crore in Q3FY19 down 6.7% from Rs. 38.2 crore in Q3FY18, whereas EBITDA stands at Rs. 72.7 crore in Q3FY19 vs Rs. 71.9 crore in Q3FY18 up 1.1%.

Bharat Electronics Ltd. (NSE: BEL) (Share Price: Rs. 91.50): Potential Buy

Valuation: Under-Valued stock with TTM PE of 11x.

Reasons to consider: Bharat Electronics Ltd. (BEL) is a Navaratna enterprise having 37% market share in Indian Defence Electronics and has strong order book. Its core business are in radar & weapons systems, defence communication & electronic warfare. Recently, company declared its third quarter result which beats the analyst estimates on all front due to strong operational performance and order execution of EVM & VVPAT.

Key Drivers: BEL is well positioned to benefit from the rising defense expenditure, supported by strong manufacturing base with current capacity utilization of 60%. An strategic collaboration with foreign technology partners for new product development will also benefit company in coming quarters. Company spends (9.0%) on R&D of its total revenues which will help them to develop innovative product in defence. Whereas, Order book of Rs 48,400 crore at end Q3FY19 looks healthly and provides strong revenue visibility.

Financials: In Q3FY19 Net Sales was Rs 2716 crore Vs Rs. 2506 crore in Q3FY18 up 8%. Net Profit at Rs. 508 crore in Q3FY19 up 68% from Rs. 303 crore in Q3FY18, whereas EBITDA stands at Rs. 785.74 crore in Q3FY19 vs Rs. 494.40 crore in Q3FY18 up 59%.

JET AIRWAYS Ltd. (NSE: JETAIRWAYS) (Share Price: Rs. 232): Avoid

Valuation: Overvalued stock with negative earnings.

Reasons to avoid: The company is posting negative earnings continuously for the last four quarters. The company is having a high debt of Rs 9600 crores on balance sheet as of 9MFY19. On top of that, recently it has added debts of Rs.225 crore by pledging fixed deposits worth Rs.1500 crores with SBI. Though this Pledging can solve short term liquidity crunch of the company but weakens it’s leverage status. Currently, jet airways not paying salary to its employees to control cost. Which further led to the downgrading by ICRA in Jan-19.

Financials: On the financial front in Q3FY19 Net Sales was Rs 6148 crore Vs Rs. 6086 crore in Q3FY18 up 1%. Net Loss at Rs. 588 crores in Q3FY19 from profit of Rs. 165 crore in Q3FY18. The company posted negative operating margins of (4%) in Q3FY19 compared to positive operating margin of 9% in Q3FY18 whereas, In Q3FY19 interest cost also increased by 15% to Rs 257 crore.

Asian Granito India (NSE: ASIANTILES) (Share Price : Rs.176.65): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 16x.

Reasons to avoid: AGL is one of the top three market players in the Tiles & Ceramics business. The company has PAN India presence with 289 exclusive showrooms. It’s continuing focus on the retail segment by launching a new product in its high margin segment marble & Quartz is expected to drive margins for the company. Improving demand and management guidance further adds earnings and margin visibility of the business. AGL has posted a robust revenue and profitability growth of 15% and 25% coupled with ROCE of 16% and ROE of 13% in the past 5 years. The stock is technically trading at the bottom levels.

Key Drivers: The well-diversified business among government and institutional clientele and the increased focus on the retail business remains one of the key drivers of the business. Moreover. Tiles and ceramic segments are expected to get a boost from the government’s initiative to build 20 million affordable houses under PMAY

Financial: In Q3FY19 Net Sales was Rs 296.22 crore Vs Rs. 263.78 crore in Q3FY18 up 12.3% YoY. Net Profit at Rs. 4.63 crore in Q3FY19 down 60.4% YoY from Rs. 11.70 crore in Q3FY18, whereas EBITDA stands at Rs. 24.98 crore in Q3FY19 vs Rs. 36.96 crore in Q3FY18 down 32.41% YoY.

Share Market Tips For March 2019: 1st Week

Ashok Leyland Ltd. (NSE: ASHOKLEY) (Share Price: Rs.87): Avoid

Valuation: Undervalued stock with TTM PE of 13.55x.

Reasons to avoid: Auto sector is experiencing drag down in volume amid low demand. Decline in a volume of M & HCV by 17% led to revenue impact by 15% YoY in the current quarter. Margins are also expected to decline over higher raw material cost and low volume base.

Financial: In Q3FY19, revenue down by 20.7% QoQ and 12.1% YoY. EBITDA margin compressed by 56 bps QoQ and 105 bps YoY. PAT down by 28.2% QoQ and 24.4% YoY.

JK Lakshmi Cement Ltd. (NSE: JKLAKSHMI) (Share Price: Rs.328): Avoid

Valuation: Overvalued with TTM PE of 55.04x.

Reasons to avoid: The company not able to withstand the higher cost of freight and power & fuel cost which results in EBITDA margin compression by 78 bps. Also, higher RM price due to clinker purchase from outside and rise in maintenance cost affected the margin. Meanwhile, short term blip is expected due to elections on ongoing infra projects which can affect demand in peak season.

Financial: In Q3FY19, net sales up 11.7% YoY. EBITDA margin stood at 10.5%. PAT stood at Rs 14.8 crores

CG Power and Industries (NSE: CGPOWER) (Share Price: Rs.37): Avoid

Valuation: Higher valued stock with negative earnings.

Reasons to avoid: The company is posting negative earnings quarter after quarter. The company delivered negative margins in the last few quarters. Promoter holding low and promoters have pledged the entire 100% of their holdings. This is a complete trading stock. Too much volatile.

Financials: The company has posted stable revenue growth in FY18. But growth on the expense side was much higher. The company posted operating margins of -5%. Interest cost is nearly tripled in the last couple of years from Rs. 80 crore to Rs. 220 crore. On the balance sheet side, reserves are going down while borrowings are increasing. Fixed assets are decreasing. Cash flows were negative for the year 2018.



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