Share Market Tips For January 2018
Jan 01, 2018 | 19:18 PM IST
Jan 01, 2018 | 19:18 PM IST
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Share Market Tips For January 2018
Share Market Tips For January 2018: 4th Week
Gati (NSE: GATI) (Share Price: Rs.138) Share Market Tip: Avoid
Valuation: Stock is trailing with PE multiple of 28x.Reasons to Avoid: Promoters stake has decreased. The company has delivered growth of 7.33% percent over past five years. Promoters have pledged more than 81.25% of their holdings.Drivers: Gati is an Indian multinational courier delivery services company headquartered in Hyderabad, India. The company is engaged in the business of supply chain solutions with express distribution and also offers warehousing, freight forwarding, trading, cold chain, e-commerce and fulfilment services. Green India Venture Fund has sold 9.50 lakh shares of Gati. The fund house has offloaded these shares at Rs 134.19 on the NSE on November 21, 2017.Financial: Quarter numbers were uncertain as far as revenue is concerned. Net earnings were stable though. Other income has contributed a lot to driving earnings on the growing side.
Jindal Stainless Ltd (NSE: JSL) (Share Price: Rs.121) Share Market Tip: Avoid
Valuation: Overvalued stock with trailing PE of 31x where industry PE is 18x.Reasons To Avoid: Promoters stake has decreased and the company has delivered a poor growth of 1.04% in last five years. Promoters have pledged more than 91% of their holdings.Drivers: Jindal Stainless is reportedly planning to establish an incubation center for agriculture technology (agri-tech) startups. The company will set up the same in collaboration with the Japanese company Future Venture Capital Company. In the year of flat earnings, adding cost in incubation center can add debt to the company.Financial: After the disastrous performance of FY16, the company has managed to deliver with positive earnings in FY17. Q1FY18 was flat as earnings were nearly zero as compared to negative earnings of the same quarter last fiscal.
Vardhman Holding (NSE: VHL) (Share Price: Rs.5280) Share Market Tip: Avoid
Valuation: Undervalued stock with trailing PE of 6.39x as compared to close peers.Reasons to avoid: Low volume stock with uneven earning trend. In current quarter margins got contracted and earnings are down by 98% Q-o-Q.Drivers: The company earns by investing in debt, equity and real estate asset which is in positive trend at present, still it is not reflecting in the companys earnings.Financial: In Q1FY18, net sales down by whopping 98% to Rs.3.91 crores Q-o-Q. EBITDA down by 98% Q-o-Q and 56% Y-o-Y. PAT of the company also tanked by 98% Q-o-Q and 61% Y-o-Y to Rs.2.63 crores.
Axiscades Engineering Technologies (NSE: AXISCADES) (Share Price: Rs.202) Share Market Tip: Avoid
Valuation: Overvalued with trailing PE of 64.43x as compared to peers.Reasons to avoid: Operating profit of the company has got impacted due to higher project cost from the US from last one year, which in turn is eating out its net profit.Driver: The company has a global presence in the aerospace engineering sector and one of the niche player. Company's project cost from the US is affecting its margins as per management which is yet to improve.Financial: In Q1FY18, net sales down by 16% Y-o-Y to Rs 53 crores. EBITDA margin stood at 6.2% vs 16.93% in Q1FY17. PAT is negative.
Share Market Tips For January 2018: 3rd Week
Claris Lifesciences (NSE: 533288) (Share Price: Rs.365) Share Market Tip: Avoid
Valuation: Stock is trailing with PE multiple of 1x.Reasons to avoid: Promoters have pledged more than 30% of their holdings. Promoters have decreased their stake. The company has a low return on equity of 7.16% for last three years. Dividend payout is on the lower side as well.Drivers: Claris Lifesciences has received a letter from the promoter Athanas Enterprise to consider delisting of shares of the pharma company from the stock exchange. The promoter/promoter group currently holds 50.13% of the share capital of the company.Financial: Results are not in support of the company. Both quarter and annual earnings were in trouble for last few years. Operating margins are negative as well.
MIRC Electronics Ltd (NSE: MIRCELECTR) (Share Price: Rs.49.7) Share Market Tip: Avoid
Valuation: Stock is trailing with PE multiple of 64x.Reasons to avoid: Promoters have pledged more than 30% of their holdings. The company has delivered negative growth of -14.64 over past five years. Promoters stake has decreased. The company has low-interest coverage ratio.Drivers: MIRC Electronics, which owns the Onida brand, has received board's approval for raising of an equity investment of Rs.144.12 crore from marquee investors to meet its long-term working capital and corporate requirements. The board has approved the issue of 1.92 crore equity shares and 1.92 crore warrants convertible into equity shares on preferential basis at issue price of Rs 37.53 to its several non-promoters.Financial: Topline and bottom line both are uncertain due to uncertainty in business. Operational efficiency is hammered down the last couple of years. Though earnings were much stable as compared to FY15 and FY16. There is a marginal recovery in the business model but still lagging consistency.
Godawari Power and Ispat Ltd (NSE: GPIL) (Share Price: Rs.520) Share Market Tip: Avoid
Valuation: Overvalued with negative earnings.Reason To avoid: The company is sitting on high debt and also promoters of the company have pledged 44.29% of their shares.Driver: Slow power sector growth affecting companies earnings. Also, high debt cost is eating its net profit.Financial: Net sales of the company down by 8.86% to Rs.1,804 crores. The company registered negative earnings in FY17 on account of higher finance cost.
Jaiprakash Associates (NSE: JPASSOCIAT) (Share Price: Rs.21.9) Share Market Tip: Avoid
Valuation: Overvalued with negative earnings.Reason To Avoid: Jaiprakash Associates experiencing selling pressure across all its business segments. The company is sitting on high debt and is undergoing debt restructuring process.Driver: The company is selling its assets to reduce its debt which is indirectly affecting earnings and enterprise value.Financial: Gross revenue of the company stood at Rs.6,757 crores in FY17 vs Rs.9,306 crores in FY16. The company posted negative earning for FY17 on account of higher finance cost.
Share Market Tips For January 2018: 2nd Week
Gangotri Textiles ltd (NSE: GANGOTRI) (Share Price: Rs.0.15) Share Market Tip: Avoid
Valuation: Stock with falling fundamentals and poor valuation.Reasons to avoid: Company has delivered negative growth over last few years. Interest coverage ratio is low. Promoters' holding is just 24%. Contingent liabilities are 122.95 crores.Drivers: Company is engaged in manufacturing of cotton yarn, specificity yarn, fabric and ready-made garments. Demand is good for the products but the quality is little inferior for the company products as compared to peers.Financial: The last couple of years company has shown significant improvement, but on YoY basis company still delivering negative earnings. Market share of the company is low.
Emco Ltd (NSE: EMCO) (Share Price: Rs.22.70) Share Market Tip: Avoid
Valuation: Poor valuation with uncertain numbers.Reasons To avoid: Interest coverage ratio is low. The company has delivered poor growth of less than one percent in last five years.Drivers: The company is dealing with operational troubles. Return ratios are on the negative side. Contingent liabilities of the company has touched to Rs.777 crore.Financial: Fundamentals of the company are on the negative side. Revenue growth looks uncertain on the Y-o-Y basis. The company is unable to deliver positive earnings for last five years.
Sanco Trans Ltd (NSE: 523116) (Share Price: Rs.260) Share Market Tip: Avoid
Valuation: Overvalued with trailing PE of 84.78x.Reasons to avoid: Market cap of the company is very low. On a consolidated basis, the company posted negative earnings since last two years.Drivers: Shipping and logistics industry is pacing up which can reflect in peers financials. The company delivered flat growth of 1.3% since last five years.Financials: Net sales stood at Rs 82 crores in FY17 vs Rs 76 crores in FY13. EBITDA stood at Rs 9.6 crores in FY17 vs Rs 15 crores in FY13. EPS stood at Rs 1.81 per share in FY17 vs Rs 35.37 per share in FY13.
Uttam Value Steels Ltd (NSE: UVSL) (Share Price: Rs.0.40) Share Market Tip: Avoid
Valuation: Poor valuation with negative earnings.Reasons to avoid: The company has delivered poor growth of -1.81% in last five years. The company has delivered negative return ratios. Drivers: Promoters have pledged more than 47% of their holdings. Lack of operational efficiency by the company dragged the company down. Financial: On YoY basis, the company has delivered negative earnings since FY14. Splitting year into quarters, the scenario is the same as all quarters are in negative territory.
Share Market Tips For January 2018: 1st Week
Emami Ltd (NSE: EMEMILTD) (Share Price: Rs.1340) Share Market Tip: Avoid
Valuation: Stock is overvalued with PE multiple of 95x.Reasons to avoid: Over last five years, the company has delivered poor growth of 11.39%. Promoters have pledged 29% of their holdings.Drivers: Emami Ltd is acquiring 30% stake in Helios Lifestyle Pvt Ltd for an undisclosed amount whereby the stake will be acquired by December 2018 through the infusion of required funds. Helios owns the fast-growing male grooming brand The Man Company which sells a range of premium grooming products for bath & body, beard, shaving and perfume and sold online through the company's own website.Financial: Quarter numbers are uncertain whereas annual numbers are falling continuously since last five years. Net earnings slipped from Rs.402 cr in FY14 to Rs.340 cr in FY17. EPS is falling and margins are flat as well.
Flexituff International (NSE: FLRXITUFF) (Share Price: Rs.92.0) Share Market Tip: Avoid
Valuation: Undervalued stock with trailing PE of 16.14x as compared to closed peers.Reasons to avoid: The company's promoters have pledged 81.26% of their holdings. The company is sitting on high debt with debt to equity ratio of 1.99x.Drivers: High debt of the company is eating out bottom line also pledged share percentage is much higher which does not give a clear long-term picture of the company.Financials: The company posted net sales of Rs.1,467 crores in FY17 vs Rs.1,325 crores in FY16. EBITDA margin stood at 12.59% in FY17 while PAT margin stood at 0.39% in FY17 which is very low.
Axiscades Engineering Technologies (NSE: AXISCADES) (Share Price: Rs.224) Share Market Tip: Avoid
Valuation: Overvalued with trailing PE of 64.43x as compared to peers.Reasons to avoid: Operating profit of the company has got impacted due to higher project cost from the US for last one year, which in turn is eating out its net profit.Driver: The company has a global presence in the aerospace engineering sector and one of the niche player. Company's project cost from the US is affecting its margins as per management which is yet to improve.Financial: In Q1FY18, net sales down by 16% Y-o-Y to Rs.53 crores. EBITDA margin stood at 6.2% vs 16.93% in Q1FY17. PAT is negative.
Emco Ltd (NSE: EMCO) (Share Price: Rs.22.95) Share Market Tip: Avoid
Valuation: Poor valuation with uncertain numbers.Reasons To avoid: Interest coverage ratio is low. The company has delivered poor growth of less than one percent in last five years.Drivers: The company is dealing with operational troubles. Return ratios are on the negative side. Contingent liabilities of the company has touched to Rs.777 crore.Financial: Fundamentals of the company are on the negative side. Revenue growth looks uncertain on the Y-o-Y basis. The company is unable to deliver positive earnings for last five years.
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