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Text of Angel Platinum Portfolioweb.angelbackoffice.com/angelbroking/econnect/...Introduction We are pleased...

  • Angel Platinum Portfolio

  • Introduction

    We are pleased to present you Angel Platinum Portfolio report. We have analyzed your risk profile and recommended the Moderate portfolio for your equity allocation.

    You have to execute the portfolio either own your own or through your Equity Advisor.

    This report contains:

    1. Risk Profile

    2. Portfolio structure

    3. Investment Rationale

    4. Past Performance

  • Risk Profile

    • Risk profile is determined based on the information provided by you and your responses in the risk profiling exercise.

    • You have emerged as an investor with a “Moderate “ profile. Investor with his profile typically have the following characteristics.

    1. Your primary goal is capital appreciation with value and growth stocks

    2. You are likely to make investments that have moderate level of risk and generates

    moderate returns

    3. Further benchmark for the portfolio will be BSE 100

  • Moderate Portfolio Structure

    *All stocks will carry equal weightages

    Sr. No Stock Name

    1 Aditya Birla Capital

    2 Dewan Housing Finance

    3 Blue star

    4 Safari Industies

    5 Parag Milk Foods

    6 Maruti Suzuki

    7 KEI Industies

    8 M&M

    9 Shriram Transport Finance

    10 Bata India

    11 Yes Bank

    12 RBL Bank

    13 Inox Wind Ltd

    14 TV Today

    15 LUMAX Industries limited

  • THE STORY OF THE STOCKS…

  • Aditya Birla Capital

    M-Cap: 20,703 Cr CMP - Rs.94

    Aditya Birla Capital (ABCL) is one of the most diversified financial services entities in India, operating under a single brand, with a presence in non-bank financing, housing finance, asset management, insurance.

    NBFC advances grew at 25% yoy to Rs.43,242cr and HFC business grew 2x yoy to Rs.,137cr for FY18. AMC segment steadily gained market share to become number 3 MF in India. Life insurance segment's Net Value of New Business margin improved from - 5.5% to 4.3% in FY18.

    We believe broad based and integrated financial offerings would enable ABCL to take benefit of financialisation of savings.

    Y/E NII PAT EPS ABV ROE P/E P/ABV

    March (Rs. cr) (Rs. cr) (Rs.) (x) (%) (x) (x)

    FY2019E 2,309 1,266 5.8 45.1 13 25 3.2

    FY2020E 3,319 1,822 8.3 53.3 16 18 2.7

    *CMP as on 26th Oct ,2018

  • Dewan Housing Finance

    M-Cap: 5,737cr CMP - Rs.182

    Dewan Housing Finance (DHFL) is the 4th largest housing finance company in India with AUM of Rs.1,11,090cr as of March 2018. DHFL is focused primarily on low-ticket financing.

    We expect DHFL's loan book to grow at CAGR of 29% over FY18-20E on the back of higher government support to affordable segment (in terms of interest rate subsidy, etc.) and low current mortgage penetration. Lately, DHFL has scaled up in LAP and builder finance, which would help to maintain NIM (FY18-2.6%) margin. Despite aggressive loan growth, DHFL has maintained healthy asset quality (FY18 GNPA at 0.96%).

    DHFL is trading at 1.7x of FY20E P/BV, which is attractive considering healthy growth in loan book, , improving cost efficiency and stable asset quality.

    Y/E NII NIM PAT EPS ABV ROA ROE P/E P/ABV

    March (Rs. cr) (%) (Rs. cr) (Rs.) (x) (%) (%) (x) (x)

    FY2019E 3,114 2.6 1,565 49.9 307 1.4 16.6 12.3 2

    FY2020E 3,789 2.5 1,931 61.6 354 1.4 17.8 10 1.7

    *CMP as on 26th Oct ,2018

  • Blue Star M-Cap: 5,076cr CMP - Rs.527

    Blue Star Limited is into the business of central air conditioning, commercial refrigeration and water purifiers.

    As per Blue Star management, Indian room air-conditioner (AC) volumes to grow from 15-20% CAGR over several years. This growth is expected to be driven by rising penetration of ACs (4-5% currently vs. 30% global average), higher disposable income and growing urbanization.

    Blue star is expect to continue to outperform the industry (sales growth in FY18, industry vs. Blue Star – 11.5% vs. 15%) on the back of strong brand recall & wide distribution network across India.

    Blue Star has maintained its leadership position in the electro mechanical space and expects healthy ~10% CAGR over next two years with margin improvement (due high margin order book).

    Y/E Sales OPM PAT EPS ROE P/E P/BV EV/Sales

    March (Rs. cr) (%) (Rs. cr) (Rs.) (%) (x) (x) (x)

    FY2019E 5,352 6.0 177 18.5 20.0 40.8 8.2 1.4

    FY2020E 6,080 6.2 213 22.2 21.9 34.0 7.5 1.2

    *CMP as on 26th Oct ,2018

  • Safari Industries

    M-Cap: 1,606cr CMP - Rs.720

    Third largest branded player in Rs.9000 cr worth Indian luggage industry

    28% of this industry is contributed by top 3 branded players namely- VIP Industries (market leader with Rs.1400 cr+ topline), Samsonite (market share fallen to 35%) and Safari (increased market share to 14%) .

    It was making losses till 2012 when it was taken over by Mr Sudhir Jatia, an ex- MD with VIP industries. Since then, it has witnessed complete restructuring in business and product portfolio.

    It has grown its revenue by 6x in the last 7 years, led by launching new products like backpack, school bags, trolley bags and expansion of distribution network

    We expect its revenue/earnings to grow by 23%/59% CAGR over FY2017-20E on the back of growth in its new launches, stable margins and its asset light model.

    Y/E Sales OPM PAT EPS ROE P/E P/BV EV/Sales

    March (Rs. cr) (%) (Rs. cr) (Rs.) (%) (x) (x) (x)

    FY2019E 532 9.8 29 13.2 20.1 48.5 9.8 2.7

    FY2020E 691 10.3 42 18.8 22.7 34.0 7.7 2.1

    *CMP as on 26th Oct ,2018

  • Parag Milk Foods M-Cap: 2,102 cr CMP-Rs. 250

    Leading dairy FMCG player

    Successful in creating strong brands and in launching innovative products faster than cooperatives like Amul and Mother Dairy

    Second player in processed cheese with 20% larger capacity than Amul. Categories like ghee also offers huge growth opportunities to gain market share

    Strong distribution expansion plan in North India

    Cheap valuations versus FMCG stocks.

    We expect PARAG to report net revenue/PAT CAGR of 13%/27% respectively over FY2018-20E.

    Y/E Sales OPM PAT EPS ROE P/E P/BV EV/Sales

    March (Rs. cr) (%) (Rs. cr) (Rs.) (%) (x) (x) (x)

    FY2019E 2,271 10.4 115 13.7 13.4 24.5 2.4 1.3

    FY2020E 2,706 11.1 162 19.3 15.9 17.5 2.1 1.1

    *CMP as on 26th Oct ,2018

  • Maruti Suzuki M-Cap: 2,02,552cr CMP - Rs.6,705

    Maruti Suzuki India Limited (MSIL), is an automobile manufacturer in India. MSIL has maintained its market leadership despite the increase in competitive intensity. MSIL has managed to increase its market share from ~42% in FY14 to 49.9% in FY18.

    In the last two years, company has seen improvement in the business mix with the pie of the utility vehicles growing from ~4% to current 15% due to successful product launched like Baleno & Vitara Brezza.

    The 2-3 months of waiting period of new models, launch of Swift Hatchback in January-2018 and headroom for more capacity utilization at Gujarat plant are the near term earning triggers.

    Y/E Sales OPM PAT EPS ROE P/E P/BV EV/Sales

    March (Rs. cr) (%) (Rs. cr) (Rs.) (%) (x) (x) (x)

    FY2019E 93,548 16 10271 340 21 25.6 5.4 2.8

    FY2020E 108,311 16.5 12192 404 21.1 21.5 4.5 2.4

    *CMP as on 26th Oct ,2018

  • KEI Industries M-Cap: 2,182cr CMP - Rs. 276

    KEI Industries (KEI) is a cable manufacturing company and also engaged in Engineering, Procurement and Construction (EPC) business.

    Currently, KEI has healthy order book of Rs.2,331cr (EPC is around Rs.1,290cr and balance from cables, substation & EHV), which is 1.5x of FY17 EPS business revenue.

    Currently, the retail segment contributes ~35% of sales, expected to touch 50% in next two years, which would aid the operating margin.

    Currently, the company has 1,200 dealers, which it plans to increase by 10-15% every year and is also involved in ad effective advertising campaigns for increasing brand visibility like IPL sponsorship, TV ad, etc.

    KEI’s exports (14% of revenue in FY17) are expected to reach a level of 20-25% in next two years on the back of higher order inflows and execution.

    Y/E Sales OPM PAT EPS ROE P/E P/BV EV/Sales

    March (Rs. cr) (%) (Rs. cr) (Rs.) (%) (x) (x) (x)

    FY2019E 3,660 10.0 156 20.3 21.8 21.7 4.7 1.1

    FY2020E 4,172 10.0 186 24.1 20.9 18.3 3.8 0.9

    *CMP as on 26th Oct ,2018

  • Mahindra & Mahindra M-Cap:90,610cr CMP - Rs.728

    Over the last 2-3 years, the stock of M&M has not delivered significant returns, however, in the recent past, we have witnessed upward momentum in the stock due to various triggers like:

    The monsoon scenario in India was good during the last 2 years and we expect normal monsoon in this year too. Normal monsoon for third consecutive year would be a strong trigger for tractor sales, which would benefit M&M due to its leadership position with 40% market share and strong brand recall.

    The company’s second large business is Utility segment. In this segment, over the last few years, M&M has been losing market share due to no new launches in SUV segment like Maruti . Currently, M&M has come up with huge pipeline of 8 new launches, of which 4 launches are completely new models which would compete with Maruti & Hyundai. This, in our view would boost the growth in this segment, as historically new launches capture the market share.

    Y/E Sales OPM PAT EPS ROE P/E P/BV EV/Sales

    March (Rs. cr) (%) (Rs. cr) (Rs.) (%) (x) (x) (x)

    FY2019E 54,297 11.8 4,143 34.8 13.1 24.7 3.2 1.5

    FY2020E 62,218 11.9 4,771 40.1 13.5 21.4 2.9 1.3

    *CMP as on 26th Oct ,2018

  • Shriram Transport Finance M-Cap: 24,328cr CMP - Rs.1072

    SHTF's primary focus is on financing pre-owned commercial vehicles. CV/LCV sales grew by 20%/25% in FY18, respectively. We expect AUM to grow at healthy CAGR of 20% over FY2018-20E led by pick up in infra/ construction before 2019 elections, macro revival and Ramping up in rural distribution.

    In last three year SHTF, GNPA and credit cost has been increased primarily due to the transition of NPA recognition from 180DPD to 90DPD (Q4FY18). FY19 Onward we expect asset quality to improve and credit cost to normalise, this would help to improve return ratio.

    We expect loan book/PAT CAGR of 20%/45% respectively over FY2018-20E. At 2.3x FY20E ABV, Valuation appears reasonable.

    Y/E Op.Inc NIM PAT EPS ABV ROA ROE P/E P/ABV

    March (Rs. cr) (%) (Rs. cr) (Rs.) (x) (%) (%) (x) (x)

    FY2019E 8,042 9.0 2,315 102 640 2.4 17 14 2.8

    FY2020E 9,702 9.1 3,284 145 762 2.8 21 10 2.3

    *CMP as on 26th Oct ,2018

  • Bata India M-Cap: 11,677 cr CMP-Rs. 908

    The Indian footwear industry is valued at Rs.50,000-55,000, which is expected to grow at a CAGR of ~15% going ahead. Two third of the industry is mainly dominated by the unorganized sector which suggest huge untapped opportunity.

    Strong retail stores expansion plan to boost growth (500 stores for next 5 years)

    Currently, women’s footwear segment accounts for ~30% of Bata sales, which the company is targeting to increase to ~40% over the 3 years

    Currently, BIL’s 30-35% sales come from premium products like Hush Puppies, Power, Marie Clarie, etc. BIL has plans to increase premium product sales from current level of total revenue over next two years

    Y/E Sales OPM PAT EPS ROE P/E P/BV EV/Sales

    March (Rs. cr) (%) (Rs. cr) (Rs.) (%) (x) (x) (x)

    FY2019E 3,063 13.5 265 20.6 15.6 40.2 6.3 3.3

    FY2020E 3,555 13.7 311 24.2 16.0 34.3 5.5 2.8

    *CMP as on 26th Oct ,2018

  • Yes Bank M-Cap: 41,727cr CMP - Rs. 180

    IN FY18, YES has reported impressive performance led by phenomenal loan growth (54% yoy) and strong asset quality (GNPA-1.28% n NPA-0.64%).CASA deposits grew 41% YoY taking the CASA ratio to 36.5%. Steady growth in CASA would help YES to achieve target of 4% NIM before March 2020.

    On asset quality front, large accounts that have been referred to NCLT (list 1 + list 2), YESBK has a total exposure of Rs. 969cr and expects 60-65% recovery of exposures in list 1 by Q2FY2019.

    YESBK currently trades at 2.4x times FY2020E Book Value, which we believe is reasonable for a bank with high-growth traction, improving CASA and prospect of improving NIM.

    Y/E Sales OPM PAT EPS ROE P/E P/BV EV/Sales

    March (Rs. cr) (%) (Rs. cr) (Rs.) (%) (x) (x) (x)

    FY2019E 1,981 13.0 126 26.8 15.7 24.6 3.9 1.7

    FY2020E 2,219 13.0 145 31.0 15.7 21.3 3.3 1.5

    *CMP as on 26th Oct ,2018

  • RBL Bank M-Cap: 21,139 cr CMP - Rs. 498

    RBL Bank (RBK) has grown its loan book at healthy CAGR of 56% over FY10-18. We expect it to grow at 30% over FY18-20E. With adequately diversified, well capitalised B/S, RBK is set to grab market share from corporate lenders (esp.PSUs)

    The retail loan portfolio grew 66% YoY to Rs.8890cr and now constitutes 22% of the loan book(18% share in 4QFY17).NIM has expanded to 3.98%, up 46bps YoY, despite a challenging interest rate scenario on the back of a changing portfolio mix and lower cost of deposits. The management stated that the bank is slated to breach 4% NIM early in FY19.

    RBL Bank currently trades at 3x its FY2020E price to book value, which we believe is reasonable for a bank in a high growth phase with stable asset quality.

    Y/E Sales OPM PAT EPS ROE P/E P/BV EV/Sales

    March (Rs. cr) (%) (Rs. cr) (Rs.) (%) (x) (x) (x)

    FY2019E 1,981 13.0 126 26.8 15.7 24.6 3.9 1.7

    FY2020E 2,219 13.0 145 31.0 15.7 21.3 3.3 1.5

    *CMP as on 26th Oct ,2018

  • Inox Wind M-Cap: 1,745 cr CMP - Rs.78

    We expect Inox Wind to report exponential growth in top-line and bottom-line over FY19-20E. The growth would be led by changing renewable energy industry dynamics in favor of wind energy segment viz. changes in auction regime from Feed-In-Tariff (FIT) to Reverse auction regime and Government’s guidance for increasing wind energy capacity from ~34GW current to 140GW by 2030.

    Further, being the lowest wind turbine producer globally coupled with healthy order book of 950MW and low debt equity, we believe INOX Wind is in a sweet spot to tap the upcoming opportunity in renewable energy segments.

    At the CMP of INR 103, Inox Wind is trading at 6.5x FY20E EPS of INR 16. Cnsidering the above positives, we assign a multiple of 8x on FY20EPS to arrive at a target price of INR 127 (potential upside of 23% over a period of next 12-18 months).

    Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales

    March (Rs.cr) (%) (Rs. cr) (Rs.) (%) (x) (x) (x) (x)

    FY2019E 3,300 17% 278 12.5 12.2 8.2 1.0 5.0 5.1

    FY2020E 3,900 15% 353 15.9 13.4 6.5 0.9 4.2 4.4

    *CMP as on 26th Oct ,2018

  • TV Today Network M-Cap: Rs. 2223cr CMP – Rs.372

    TTNL enjoys a strong viewership ranking in the Hindi and English news channel categories. The company’s Hindi news channel – Aaj Tak has maintained its market leadership position occupying the No.1 rank for several consecutive years in terms of viewership.

    Its English news channel – India Today too has been continuously gaining viewership; it has now captured the No. 4 ranking. Its other channels like Dilli Aaj Tak and Tez are also popular among viewers.

    We believe that upcoming 2019 Lok sabha elections would boost the revenue growth and gradually reduction in radio business losses would improve the company’s margin going ahead.

    Y/E Sales OPM PAT EPS ROE P/E P/BV EV/Sales

    March (Rs. cr) (%) (Rs. cr) (Rs.) (%) (x) (x) (x)

    FY2019E 815 26.9 139 23.3 16.3 19.2 3.1 2.8

    FY2020E 929 26.9 158 26.3 16.0 16.9 2.7 2.3

    *CMP as on 26th Oct ,2018

  • LUMAX Industries limited

    M-Cap: Rs. 1,534 cr CMP - Rs.1641

    LUMAX Industries limited, (LIL) a flagship company of D.K. Jain Group with the presence in Automotive Lighting Industry. LIL is the market leader & supplies to majority of OEM’s including MSIL, HMSI, Hero Moto Corp, M&M, TATA Motors, Honda Cars and others.

    Share of LED lamp has improved from 8% in FY17 to 35% in Q1FY19 and management believe this ratio to improve further going forward.

    Strong relationship with majority of Auto OEM, increasing sales of PV, 2W and CV and Improving revenue mix from Halogen lamp to LED lamp leads to better revenue and realization going ahead.

    On the basis of above arguments we like to assign a multiple of 21X on FY20 EPS to arrive at price target of INR2550 (upside 24%).

    Y/E Sales OPM PAT EPS ROE P/E P/BV EV/Sales

    March (Rs. cr) (%) (Rs. cr) (Rs. ) (%) (x) (x) (x)

    FY2019E 1,980 8.6% 92 98 22 21 4.5 1.0

    FY2020E 2,336 8.9% 14 122 23 17 3.8 0.8

    *CMP as on 26th Oct ,2018

  • Past Performance

  • Top-Picks vs Mutual Fund vs BSE 100 (Oct 30, 2015 – Sep 11, 2018)

    Angel Recommended Top-Picks’ Performance

    Note: *Average returns of Top 10 Multi-Cap Funds (based on AUM)

    67.21

    44.11 41.15

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    Top Picks MF Schemes BSE 100