Top Stocks Under Rs 50: Do you remember the days when you would get Rs 50 as pocket money? You could buy the world for Rs 50. Sometimes it was a tummy full of snacks. Other times it was a thick bundle of kites. Well, the times they are a-changin’. But did you know you can save 50 bucks and invest in good stocks under Rs. 50? 

A quick run on Screener fetches some 1,900 companies trading in the market with a share price of less than Rs. 50 per share. How do you go about picking profitable companies among this large pool? What filters to use: revenue growth, profitability, debt to equity ratio or what else? 

In this article, we bring to you top stocks under Rs 50. So without further ado, let us jump in.

Top Stocks Under Rs 50

Top Stocks Under Rs 50 #1 – Trident Ltd

Trident was established in 1990 as a yarn manufacturing company. It later entered terry towel manufacturing in the late 1990s. Over the years, the company slowly diversified into the paper, chemical and energy sectors.  

Fast forward to today, Trident is a well-diversified mid-cap company manufacturing yarn, textiles and paper with an international presence in 150 countries across the globe. It has four manufacturing plants located in India. The Ludhiana, Punjab headquartered country is also the largest manufacturer of wheat straw-based paper and terry towels in the world. It employs 15,000 people and has solid retail and online presence.

The primarily textile company produces various products including rugs, bed sheets, mats, pillows, quilts, writing & printing maplitho paper, and scritta & offset paper. 

The China +1 strategy has aided the company to post record profits. As a result, its share price has sky-rocketed more than 486% in the last two years.

Top Stocks Under Rs 50 #2 – RVNL

A government entity on the list, RVNL is tasked with the implementation of infrastructure projects of the Railways Ministry in India. These projects can be the installation of railroad tracks, their upgrade/changes, railway electrification, building major bridges, and setting up workshops or production units. In addition to this, it has also commissioned multiple metro-rail projects. 

Rain Vikas Nigam traces back its origin to 2002. It was set up as a part of the larger National Rail Vikas Yojana scheme to reduce the rail infrastructure deficit.

At present levels, the stock offers a high dividend yield of over 4.8%. Furthermore, it trades at an attractive PE of 5.5. The company’s revenues have grown at a rapid CAGR of 26.8% over the last 5 years. It has seen a consistent rise in net profits too.

Top Stocks Under Rs 50 #3 – HUDCO

Housing and Urban Development Finance Corporation (HUDCO) was set up in April 1970 as a public financial institution. It is a public sector company under the Ministry of Housing and Urban Affairs (MoHUA).

HUDCO is responsible for providing long-term finance and provides consultancy services for the construction of residential & urban programmes, satellite towns, and industrial enterprises. Additionally, the company subscribes to debentures, bonds and mutual funds issued by various development bodies.

Barring FY22, the revenues of the company have consistently increased from Rs. 3,270 crores in FY16 to Rs. 7,267 crore and Rs. 6,954 crores in FY21 and FY22 respectively. Likewise, its profits grew at a CAGR of 13.97% since 2016.

As a fundamentally attractive stock, it offers a high dividend yield of 8.8% presently at an impressive price-to-earnings ratio of 4.63.

Top Stocks Under Rs 50 #4 – NHPC Ltd

Another government enterprise with a share price under Rs. 50, NHPC is the largest hydropower development company in India. It offers a full range of services from conceptualization to commissioning in relation to the setting up of hydro projects. It has also diversified in the field of solar and wind power development.

As of today, NHPC has an installation base of 7071.2 MW from 24 power stations including two joint-venture projects. Furthermore, it is constructing 11 projects of varying sizes amounting to a capacity of 7539 MW. In addition to these, its 8 projects worth 7652 MW capacity are presently under clearance stage and 5 projects aggregating to a capacity of 2455 MW are in the survey & investigation stage.

In the last three years, NHPC has given a satisfactory return of 65% to its shareholders. This has been primarily because of the rise in net profits from Rs. 2,885 crores in FY20 to Rs. 3,524 crores in FY22.

Top Stocks Under Rs 50 #5 – IDFC First Bank Ltd

IDFC FIRST Bank was established by the merger of erstwhile IDFC Bank and erstwhile Capital First in December 2018. Set up in 1997, IDFC specialized in corporate banking. Founded by Mr Vaidyanathan, Capital First had a strong retail presence and was looking for a banking license to become a bank.

The merger proved beneficial for both companies as it resulted in a diversified loan book amid India’s changing economic landscape.

As of today, IDFC First Bank is a leading tech-driven bank with a customer base of more than 7.3 million and growing. As of March 2022, its CASA deposits stood at Rs. 51,170 crores with a CASA ratio of  49.88%.

It has a well-diversified lending portfolio with more than 20 business lines. The bank has a strong capital adequacy ratio of 16.74%.

Its earnings have been volatile after the merger but there are green shoots visible with improving returns and stellar profits of Rs. 352 and Rs. 485 in the March and June quarters of 2022 respectively.

List of Top Stocks Under Rs 50

We covered the above 5 companies with share prices under Rs. 50. The list below presents more such stocks under Rs. 50.

In Conclusion

In this article, we went through some of the top stocks under Rs 50. Some of these companies have given impressive returns in recent years to their shareholders. The companies were of varying sizes across different industries.

While there are some novice trading strategies that advise picking stocks trading near rounded-off numbers. However, they are as ineffective as they are easy. It is not advisable to hold stocks only on the basis of their price.

Having said that what do you keep in mind while picking stocks? Do you also look for a price tag, say stocks under Rs. 50? Or do you look at fundamentals? Or what else? How about you let us know 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 favourite stocks.

The post Top Stocks under Rs 50 to add to your watchlist – Detailed Analysis appeared first on Trade Brains.

Fundamental Analysis of CDSL: The last two years proved to be a boon for India’s stock market as the companies generated heavy returns for the shareholders. Wouldn’t it make sense to bet on India’s Dalal Street growth similar to the way we invest in some sector stocks? Well, there are stocks you can buy to track the growth of India’s stock market. One such company is Central Depository Services (India) Ltd. or CDSL.

In this article, we’ll conduct a fundamental analysis of CDSL. We start with getting to understand what a depository means and the industry landscape in India. Later we move ahead to know CDSL’s history, its growth and other fundamentals. A summary concludes the article in the end.

CDSL is one of the two depositories in India. But before we jump in it would help if you know what a depository is in and out. You cant find that here: CDSL and NSDL – What are the Roles of Depositors?

Industry Overview

Let us now read ahead to know the depository landscape in India. As of today, there are only two depositories in India:

1. Central Depository Services Limited (CDSL)
2. National Securities Depository Limited (NSDL)

Thus it is clear that depositories enjoy a duopoly in India. Both of them have been promoted by government institutions signifying greater scrutiny SEBI wants for Indian financial markets. 

Talking about the growth of the depository business, it is directly dependent on growth in capital markets. As the activity in the market increases, so do the transactions resulting in growth for the industry as a whole.

The BSE Sensex increased from 22,386 in FY 2013-14 to 58,568 in FY 2021-22 making India’s stock market the 7th largest in the world. This expansion was brought by IPOs, an increase in trading volumes, growing FPIs presence, rising retail participation and ease of account opening & online initiatives. Therefore, earnings for depositories grew in the same proportion. 

In particular, the rise in retail participation demands a separate space for explanation. After the Coronavirus-induced lockdown, many people started exploring the stock market. As a result, FY21 and FY22 saw record new retail participation as more and more people opened their accounts.

Consequently, increased retail participation brought liquidity which attracted companies looking to raise funds. More than sufficient liquidity generated heavy returns in general and on listings which further invited investors. Thus, the previous two years proved to be a boon for the stock exchanges and depository companies.

Growth in the Number of Demat Accounts Opened in India

Going forward, the outlook for the Indian economy stays strong translating into better earnings and good performance of the stock market. All this optimism bodes well for the depositories.

Fundamental Analysis of CDSL – Company Overview

Central Depository Services Limited or CDSL was initially promoted by the Bombay Stock Exchange in 1999. Later, the stock exchange sold its stake to leading banks. As of this day, it has assets under custody of more than Rs. 36,89,733 crores.

The leading depository has 583 depository participants spread across 20,376 geographical locations having 7 Cr. investor accounts.

Shri Nehal Vora is the Managing Director & Chief Executive Officer of CDSL since September 24, 2019. He comes with 2 decades of experience and served as the Chief Regulatory Officer of BSE Limited in his previous role.

Now that we’ve got a quick overview of CDSL’s history and present state. Let us now jump to understand its business model and revenue segments.

CDSL – Business Model and Revenue Segments

We now understand the depository landscape in India. Let us now look at the client base of CDSL to understand how it earns its revenues.

We can categorise CDSL’s clientele into the following segments:

Depository Participants: A DP is an agent of the depository who acts as a link between companies and investors. An investor opens an account with a depository participant. Whatever charges she pays to conduct transactions through a DP form part of a depository’s income as transaction charges.

Issuer Companies: Numerous entities issue a wide range of securities in dematerialization form with CDSL. Through CDSL, these issuer companies are able to credit securities to a shareholder’s or applicant’s account. Annual fees from these issuer companies amount to significant revenues for CDSL. Along with this, new offerings in the form of IPO or any corporate actions also generate earnings for the company.

Capital Market Intermediaries: Stock exchanges or capital market intermediaries bring business as CDSL facilitates holding and managing settlements of trades conducted on the stock exchanges.

Insurance and Warehouses: Through its subsidiaries, CDSL holds and helps to trade insurance policies and negotiable warehouse e-receipts.

The figure below shows the composition of revenue of CDSL for the financial year 2021-22.

Fundamental Analysis of CDSL – Financials

Revenue and Net Profit Growth

Taking a five-year time horizon, the revenues and net profit of CDSL have grown at a CAGR of 24% and 25% respectively. A closer look at the data reveals that significant gains have been recorded over the past two years. 

The year-on-year growth in sales was 60% in FY21 and FY22 both. As for the net-profit figures, the growth recorded was 89% and 56% for the two fiscal years. As discussed earlier, it is because of India’s stock market’s heavy retail participation in the last two years.

Operating Profit Margin and Net Profit Margin

CDSL can be primarily categorised as a technology and financial services company. Its main expenses are employee salaries and computer technology-related costs. Most of these are expensed. 

In addition to this, the company being in a duopoly enjoys adequate pricing power without being at the risk of a price war.

Both the points put together, it boosts high operating and net-profit margins. 

The table below exhibits the profit margins of CDSL over the last 5 years. We can see that they have substantially widened over the last two years.

Debt and ROCE

Carrying forward the point that it is a technology service provider, CDSL doesn’t require any outside funds to conduct business. The company has zero debt.

As for its return ratio, CDSL’s business generates a healthy return on capital employed. Its ROCE stood at a whopping 42% and 32% in FY22 and FY21 respectively. It has improved over the past two years. Previously, it used to hover in/around the 23-25% range.

CDSL – Future Plans

CDSL’s growth in revenues will come from newer clients/customers and leveraging its existing base. Along this line, the service provider is working on various initiatives to accelerate its growth:

1. It has plans to offer a single Demat account which will hold all financial assets across different regulators (SEBI, RBI, IRDAI, PFRDA, etc.) in one place.
2. It constantly looks out for any paper-based processes to convert them into a digital workflow. 
3. Develop more APIs to ease interoperability with the DPs for higher value creation. 
4. CDSL conducted investor awareness campaigns in non-metro cities and small towns in FY21 and FY22 on a small scale. The company plans to conduct more such drives in future in association with SEBI, financial institutions, and universities to increase the number of new investors.
5. The depository plans to reach out to the unlisted public and private limited companies to pitch them the benefits of dematerialisation. This will result in dual earnings in terms of an increase in issuer charges and a larger number of promoters’ Demat accounts.
6. CDSL has set up a new company, India International Bullion Holding IFSC Ltd to handle the bullion business in Gift City, Gujarat. Later it plans to expand into silver and other precious metals, commodities, etc. as approved by IFSCA.

CDSL – Threats

CDSL enjoys a duopoly along with NSDL. Furthermore, CDSL’s size gives it a competitive advantage and power over NSDL. On the face of it, there seems to be no threat to CDSL whatsoever.

However, last year in June SEBI came up with a discussion paper on ‘Review of Ownership and Governance norms for facilitating new entrants to set up Stock Exchange / Depository’. The purpose was to contemplate the formation of more depositories.

It is yet unclear when the regulators will allow the setting up of more such entities. But it does point to the fact that sooner or later CDSL’s authority as the leading depository institution may be challenged.

CDSL – Shareholding Pattern

The table below presents the shareholding pattern of CDSL as of June 30, 2022.

Fundamental Analysis of CDSL – Key Metrics

We are almost at the end of our fundamental analysis of CDSL. The table below lists key metrics of CDSL.

In Conclusion

The stock of CDSL trades at a high P/E ratio of 42. Either we can disregard it as overvalued or admit to paying a premium to acquire the leading company between the only two depositories in India. Going forward, the challenge for CDSL will be to maintain its growth and deliver to the high expectations of its investors.

Since its listing in 2017, CDSL’s stock has given an impressive return of 29.60% annually. Will it be able to sustain this CAGR for its investors? It is said that time has all the answers in markets. Till then, keep saving and keep investing.

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 favourite stocks.

The post Fundamental Analysis of CDSL – Financials, Future Plans & More appeared first on Trade Brains.

Top Stocks Under Rs 200: A Red Bull energy drink costs just under Rs. 200. and So does a Chai at Chaayos. But did you know you can also own good stocks under Rs. 200. There are many options to choose from small-cap, mid-cap and even large-cap. You may be a novice investor hoping to buy low-quotation stocks or a trader looking for profits on volume. These stocks under Rs. 200 can be useful for you.

Though the investor appetite for such fundamentally strong stocks is huge, the availability is in short supply. A quick run on Screener fetches some 2,900 companies trading in the market with a share price of less than Rs. 200 per share. How do you go about picking profitable companies among this large pool? What filters to use: revenue growth, profitability, debt to equity ratio or what else? 

In this article, we bring to you Top Stocks Under Rs 200. So without further ado, let us jump in.

Top Stocks Under Rs 200

Let us look at the 5 top stocks under Rs 200 in detail.

Top Stocks Under Rs 200 #1 – GMDC Ltd

Founded in 1963, Gujarat Mineral Development Corporation (GMDC) Ltd. is a leading state-owned mining and mineral processing company. Based out of Ahmedabad, it is also India’s second-largest lignite-producing company.

GMDC has no debt and was ranked 132nd on India’s Fortune 500 Companies list in 2017. It is amongst the top five Indian entities by market capitalization in the mining sector. 

The company is involved in the exploration of Manganese, Silica Sand, Bauxite, Lignite, Ball Clay, Limestone, and other minerals. These minerals find their uses in a variety of industries: glass making, ceramics, chemicals, water treatment, oil drilling and more.

In addition to this, GMDC has a significant presence in the energy sector. It has a sizable portfolio of thermal power projects and also renewable energy projects (wind and solar power both). 

On the back of strong earnings growth, its stock price has rallied 190% in the last year giving a multi-bagger return to its investors.

Top Stocks Under Rs 200 #2 – EPL Ltd

Owned by the Blackstone Group, EPL is the world’s largest speciality packaging company. The global asset manager purchased the company from Essel Group of Companies in August 2019. Later in mid-2020, Blackstone trimmed almost ⅓ of its stake to 51.91%.

EPL manufacturers laminated plastic tubes and dispensing systems. These products find their application in oral care, beauty & cosmetics, pharmaceuticals & healthcare, and food & home care segments. 

EPL has 20 plants spread across 12 countries around the world producing 8 billion tubes every year for its 1200 clients. It has strong relationships with reputed MNCs and Indian companies such as P&G, Colgate, Unilever, GSK, Reckitt Benckiser, Johnson & Johnson, Dabur, Emami, Himalaya, Patanjali, and more.

Though the company has reported profits consistently, its share price has declined more than 37% since its IPO in October 2020. It has low debt and the stock offers a good dividend yield of over 2.5%.

Top Stocks Under Rs 200 #3 – Ashok Leyland Ltd

Ashok Leyland was founded as Ashok Motors in 1948. It is owned by Hinduja Group and is India’s second-largest commercial vehicle manufacturer, the fourth largest manufacturer of buses in the world and the 19th largest manufacturer of trucks globally.

This Chennai-headquartered company has a global footprint with 7 manufacturing facilities in India and 2 overseas. It has a well-diversified portfolio across the automobile industry producing heavy commercial vehicles, light commercial vehicles, engines, and even defence vehicles.

Ashok Leyland has also emerged as a leader in the EV space with its EV arm Switch Mobility. It has modified its various models into electric vehicles. Recently Switch Mobility unveiled India’s first double-decker EV bus. It will replace the entire fleet of 200 double-decker buses in Mumbai. 

However, Ashok Leyland reported losses in the last two fiscal years because of the heavy interest it had to pay on its debt. Optimistically, the rebound in the auto-cycle may result in a favourable change in the fortunes of the debt-laden auto-maker.

Top Stocks Under Rs 200 #4 – IEX

Indian Energy Exchange (IEX) was promoted by 63 Moon Technologies and Power Trading Corporation of India in June 2008. It is an electronic system-based power trading exchange regulated by Central Electricity Regulatory Commission.

It has become India’s premier energy marketplace by providing an automated trading platform for the physical delivery of electricity, renewables, and certificates. Not only this, IEX also pioneered cross-border electricity trade.

Today it has a network of 6,800+ participants spread across India comprising more than 500 distribution utilities and over 500 conventional generators. In addition to this, the power exchange has upwards of 4,400 commercial and industrial customers.

Its revenues and profits have consistently grown over the years. The company is debt free and has maintained a high dividend payout ratio of more than 55% in the last two years.

Top Stocks Under Rs 200 #5 – Oil India Ltd

Oil India Ltd. (OIL) is a Navratna status company which was incorporated on 18th February 1959. It comes under the Ministry of Petroleum and Natural Gas and is the nation’s second-largest national oil and gas company.

It has a sizable presence across the entire value chain in the hydrocarbon space. It owns and runs a variety of facilities for exploration, drilling, oil & gas field development, production, and transportation making it an integrated E&P company. 

Recently the company also made a foray into the city gas distribution projects in an attempt to diversify its non-E&P energy value chain. In addition to this, OIL has taken forward-looking steps by investing in renewable & alternate energy by installing solar and wind projects.

Barring 2021, its net profit and sales have consistently increased over the last 6 years. The stock offers a high-dividend yield of 4.85% at a very low P/E of 2.81 only.

Key Metrics

We covered top stocks under Rs 200 in detail above. The list below lists more such companies with share prices less than Rs. 200.

In Conclusion

In this article, we covered Top Stocks Under Rs 200. While it is good to have an idea of the stock prices of different companies, it is not advisable to pick stocks only on the basis of their price. An investor should have a holistic view.

As a retail investor, what investment approach do you follow? Do you prefer small-cap companies, mid-cap or large-cap or keep a balance between them? How about you let us know 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 favourite stocks.

The post Top Stocks under Rs 200 to add to your watchlist – Detailed Analysis appeared first on Trade Brains.

Fundamental Analysis of BSE – The last two years proved to be a boon for India’s stock market as companies generated great returns for their shareholders. As a result, the stocks that run India’s Dalal Street rose sharply in value. Shares of BSE Ltd. returned more than 260% in only two years. As a stock exchange business, BSE is a stable company with consistent earnings from listing fees and transaction charges.

In this article, we’ll conduct a Fundamental Analysis of BSE. We start with getting to understand the industry landscape in India. Later we move ahead to know BSE’s history, its growth and other fundamentals. A summary concludes the article in the end.

Industry Overview

The Bombay Stock Exchange (BSE) and the National Stock Exchange handle most of the trading in the Indian stock market. Though BSE is older than NSE, NSE is a larger stock exchange in terms of volume. Apart from these two, there were various regional stock exchanges in India as well but they have been shut down.

Thus we can conclude that stock exchanges enjoy a duopoly in India similar to the two depositories: CDSL and NSDL. Both exchanges have the same trading mechanism, settlement process, and marketing timings. They both compete aggressively for the order flow resulting in market efficiency, low costs and sustained innovation. 

Talking about the growth of the stock exchange business, it is directly dependent on growth in capital markets. As the activity in the market grows, so do the transactions resulting in growth for the industry as a whole.

The BSE Sensex increased from 22,386 in FY 2013-14 to 58,568 in FY 2021-22 making India’s stock market the 8th largest in the world. An increase in trading volumes, a record number of IPOs, improving retail participation, growing FPIs presence, and ease of account opening & online initiatives brought about this expansion. Therefore, income for stock exchanges grew in the same proportion. 

In particular, the rise in retail participation demands a separate space for explanation. After the Coronavirus-induced lockdown, many people started exploring the stock market. As a result, FY21 and FY22 saw record new retail participation as more and more people opened their accounts.

Consequently, increased retail participation brought liquidity, attracting companies looking to raise funds. More than sufficient liquidity generated heavy returns in general and on listings which further invited investors. Thus, the previous two years proved to be a boon for the stock exchanges and depository companies.

Going forward, the outlook for the Indian economy stays strong translating into better earnings and good performance in the stock market. All this optimism bodes well for the stock exchanges.

Fundamental Analysis of BSE – Company Overview

Established in 1875, BSE (formerly known as Bombay Stock Exchange) is the fastest stock exchange in the world with a speed of only 6 microseconds. It is Asia’s first stock exchange and was initially named ‘The Native Share & Stock Brokers’ Association’. It became the first recognized Indian stock exchange in August 1957. Later, BSE got listed in February 2017 and became the first listed stock exchange in India.

According to the World Federation of Exchanges, BSE was the 8th largest stock exchange globally in March of 2022. At the time of writing of this article, the market capitalization of all BSE listed companies stood at Rs. 2,75,81,225 Crores. It has a total of 5,350 listed companies.

As a stock exchange BSE facilitates efficient and transparent trading in equity, currencies, debt instruments, derivatives, and mutual funds. In addition to the primary exchange for stocks, BSE also provides various other platforms for the trading of other securities:

1. BSE SME – India’s largest SME platform with more than 250 companies.
2. BSE StAR MF – India’s largest online mutual fund platform processing over 27 lakh transactions every month.
3. BSE Bond – It is an electronic book mechanism for the private placement of debt securities.
4. India INX – Located at GIFT CITY Ahmedabad, India International Exchange is 22 hours exchange offering trading, clearing and settlement across all major asset classes, including securities, equity derivatives, precious metals, base metals, energy and bonds.
5. BSE Sammaan – It is a CSR exchange that helps corporates to connect with verified NGOs.

We pretty much understand in depth what all BSE does. Let us now move ahead to conduct BSE’s fundamental analysis.

Fundamental Analysis of BSE – Financials

Revenue and Net Profit Growth

Barring FY20, the revenues and net profits of BSE Ltd. have grown at a steady pace. It must be noted that profits were unusually high in FY18 because of the gain on the sale of a subsidiary. 

As for the FY22 gains, it is primarily because of a y-o-y increase of about 28.6% in average daily value of equity turnover on BSE from Rs. 4,197 Crore in FY 2020-21 to Rs. 5,396 crores in FY 2021-22. As discussed above increased retail participation and record issues among other reasons resulted in better earnings for the stock exchange company. 

As for the revenue segments of BSE, it reports all its earnings under one segment viz stock exchange operations. Therefore, no data could be obtained for revenue composition.

The table below shows the revenue and net profit of BSE for the last five years.

Profit Margins & ROCE

Net profit and gross profit margins are high for BSE as it is in the financial and technology services industry. Furthermore, the duopoly nature of the industry aids its margins too. 

Return on capital employed by BSE has been low. Although it gained sharply to 15% in FY22, it will be better to wait and track the performance of the business and quarter results to make sure it can continue with its impressive returns.

Zero Debt 

BSE’s balance sheet boasts zero debt because of the nature of its business. As the company is in the services industry, it doesn’t have to keep any inventory, saving the business any short-term liabilities. 

Additionally, most of the real estate it owns was acquired a long time back. Hence, it doesn’t have any debt obligations on it either.

Fundamental Analysis of BSE – Future Plans

In recent years Bombay Stock Exchange has launched various other platforms including the esteemed India International Exchange at Gift City, Gujarat. However, it may take some time for earnings from these newer sources to materialise.  

The FY22 annual report of BSE highlighted that India INX’s market share at GIFT IFSC increased to 96.38%. However, it doesn’t give a true picture of the overall size of INX as it uses only a small market of GIFT IFSC to prove its point. Thus we shall have to wait for solid numbers to assess INX’s ability to emerge as a strong earnings generator for BSE.

Summing it up, we can conclude that though BSE has many projects in the pipeline, all are still in the incubation phase when compared to its main business.

Shareholding Pattern

We are almost at the end of our case study of BSE Ltd. It would be interesting to know who owns how much of BSE. 

The table presents the shareholding pattern of BSE Ltd as on June 30, 2022.

Fundamental Analysis of BSE – Key Metrics

The table below presents various metrics for a quick evaluation of the company.

In Conclusion

BSE Ltd. as a stock exchange enjoys stable and consistent earnings from listing charges and various transaction charges and fees. For the foreseeable future, the industry has no new competitive threat. 

As a consequence, it may not result in sharp gains for the shareholders of the company as this low risk gets priced in the stock price. Hence, the investors will have to wait for another boom to witness the gains as they did in the last two years.

Will BSE be able to give stellar numbers in the coming quarters or not? They say that time has all the answers in the markets. Till then, keep saving and keep investing.

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 favourite stocks.

The post Fundamental Analysis of BSE – Financials, Future Prospects and More! appeared first on Trade Brains.

How long does a bear market last? Many new investors wonder, what would it be like if the markets keep escalating or stock prices keep rising. However, this has rarely happened.

We switch off machines and maintain them to ensure smooth functioning. The markets are no different! Financial markets need to reset from record-setting performances. Otherwise, prices balloon and everyone apart from the early investors has to buy shares at overinflated prices.

In this article, we shall look at what bear markets are, what causes them, and How long does a bear market last?

What are bear markets?

A bear market is a situation when markets experience a prolonged decline in prices. The markets are bearish when the prices of securities fall by 20% or more from their recent highs. This happens amid pessimism and negative investor sentiments.

Bear markets are a time of uncertainty for investors. Portfolios are in the red and it gets uncomfortable to watch our holdings fall. However, knowing that there is a light at the end of the tunnel can help.

What causes bear markets?

Some of the common causes of bear markets are:

• the bursting of market bubbles
• public health crises
• geopolitical crises
• slowing economic growth or poor economic data
• contractionary monetary or fiscal policies
• recessions

How long does a bear market last?

Bear markets happen often and are a part of the economic cycle. However, they indicate a potential economic downturn. Geopolitical risks and the bursting of market bubbles are common causes why markets slip into a bearish phase.

Experts say that each bear market is different and unique. There is no way to say how far the market may drop or for how long it may last. But, bear markets can be beneficial. Many investors make money by investing in inverse ETFs or short-selling stocks.

Bear markets are generally categorized as secular or cyclical. Secular bear markets are driven by forces or influences that cause the price of securities to fall over an extended period, generally years. On the other hand, cyclical bear markets are generally caused by normal market volatility and generally last for a few months.

Stages of bear markets

The stages of a bear market can help us to understand if the bear market might end soon or if it might last for a long time. Usually, bear markets occur in four stages:

Stage 1: Recognition

Investors have a positive sentiment and the prices are high. Investors generally tend to ignore the initial onset of a bear market and mistake it for ordinary day-to-day fluctuations. A few investors realize that it’s a bear marker towards the end of this stage and start selling their securities.

Stage 2: Panic

There is panic in the markets and investors tend to capitulate. Trading volumes drop and economic indicators point to a worsening economy. Investor sentiments drop significantly.

Stage 3: Stabilization

Panic begins to taper off and investors start to digest the reason for the price decline. This stage is usually turbulent and volatile. It lasts the longest out of the other stages. Speculators enter at this stage and there may be rallies that tend to reverse.

Stage 4: Anticipation

Prices begin to level off at this stage and low valuations or good news regarding the securities start attracting investors into purchasing securities.

The history of bear markets in India

Many analysts say that one cannot anticipate how long bear markets last, however, we can look at past data to get an idea. India has gone through four bear markets in the past:

1997-98

Triggered by the Asian financial crisis and preceded by the Russian debt default. India’s balance sheet was good and was not part of the crisis. However, the crash in the Asian markets had an impact on the Indian markets.

This was followed by the crash in the Russian markets when Russia devalued the Ruble and defaulted on domestic debts and declared a moratorium on payment to foreign creditors.

2000-01

The bursting of the tech bubble culminated with the terrorist attacks in the US. India witnessed some collateral damage in the software services sector, however, the bear market was US-centric.

2008-09

This happened due to the global financial crisis. India felt the crisis through its capital account and the stock market was among the worst performers globally. However, Indian banks were unaffected.

The prices of securities suffered deep cuts and more than 99% of the stocks yielded negative returns from January-November 2008. The BSE Smallcap index ended the cycle with a net loss of 41 per cent from its value at the beginning and 80 per cent from the January 2008 value.

The BSE Midcap Index lost 36 per cent from its value at the beginning and 75 per cent from January 2008. Moreover, Sensex lost 18 per cent from its beginning value and 60 per cent from its January 2008 value.

2020

The bear market in 2020 was induced by the effects of the Covid-19 pandemic. The markets dropped by 34.22%. The outbreak of Covid-19 resulted in lockdowns around the world. This led to a huge market crash in the global as well as Indian markets.

Once it was declared a pandemic by the World Health Organization, the Sensex dropped from 42,271 points to 28,288 points within a week. Moreover, it coincided with the Yes Bank crisis, which made the strong BFSI sector lose crucial points.

In Closing

The stock markets have been bearish in the past for a variety of reasons. They include wars, political instability, banking crises, diseases and more. While the occurrence of bear markets is inherent to the markets, recoveries have also been consistent. It is difficult to guess how long bear markets last, but recognizing the stages can help, especially for long-term investors.

That’s all for this article on How long does a Bear Market last! We hope to see you around and happy investing until next time!

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 favourite stocks.

The post How long does a Bear Market last? History and Causes for the Crash appeared first on Trade Brains.

Tamilnad Mercantile Bank Ltd. is coming up with its Initial Public Offering. The IPO will open for subscription on September 5th, 2022, and close on September 7th, 2022. It is looking to raise Rs. 831.60  Crores. In this article, we will look at the Tamilnad Mercantile Bank IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out! 

Tamilnad Mercantile Bank IPO Review – About The Company

Tamilnad Mercantile Bank Limited (TMB) is one of the oldest and leading old private sector banks in India with a history of close to 100 years. The bank caters to micro, small and medium enterprises (“MSME”), agricultural and retail customers (“RAM”).

As of June 30, 2021, the bank has 509 branches, of which 106 branches are rural, 247 in semi-urban, 80 in urban, and 76 in metropolitan centres with an overall customer base of approximately 4.93 million. The company reported deposits of ₹ 409.70 billion and advances of ₹ 310.70 billion as of March 2021.

Tamilnad Mercantile Bank IPO Review- Financial Highlights

(Source: DRHP of the company)

Tamilnad Mercantile Bank IPO Review- Competitors

Tamilnad Mercantile Bank IPO Review – Industry Overview

Public banks which accounted for 71% share in credit outstanding in Fiscal 2015, account for only 59% share as of Fiscal 2021 while the rest was captured by the private banks.

The covid-19 pandemic disrupted the sector as the entire economy halted and credit circulation was interrupted. To combat the situation RBI, India’s central bank announced a host of measures to enhance liquidity, ease financial market conditions, address cash flow concerns, and improve market sentiment following a near-halt in economic activity.

The banking sector enjoyed healthy deposit growth of 10% compound annual growth rate (CAGR) between Fiscals 2015 and 2020. In FY22-23 the deposit growth is expected to slow down to 6-8%.

In Fiscal 2022, agri-loans are expected to increase 10-11% on year provided the monsoon is normal and on expectations of higher food grain and horticulture production, and support from the agri-fund.

Strengths of the Company

• The company has a strong legacy, a loyal customer base, and a wide network of branches.
• The bank has a strong presence in Tamil Nadu and is consistently focusing to expand its presence in strategic regions.
• The bank also is Consistently growing its deposit base with a focus on low-cost retail CASA  (current and savings account) ratio.
• The bank has Strong asset quality, underwriting practices, and risk management policies and procedures in place.
• It is a professionally managed Bank with an experienced senior management team and a board of directors.

Weaknesses of the Company

• A total of 37.61% of their paid-up equity share capital or 53.59 million Equity Shares are subject to outstanding legal proceedings which are pending at various forums.
• An increase in the bank’s portfolio of Non-Performing Assets (NPAs) may adversely affect the business.
• The bank is required to lend a minimum percentage of our Adjusted Net Bank Credit (“ANBC”) to certain priority sectors. Any decline in performance will affect them.
• The bank is exposed to certain inherent risks like interest rate risks, fraud, petty theft, negligence, embezzlement, and technological risks.
• The main source of revenue for the bank is the fees they charge. Any change in that will alter the ability of the bank to generate revenue.

Tamilnad Mercantile Bank IPO Review- GMP

The shares of Tamilnad Mercantile Bank traded at a premium of 4.19% in the grey market on August 31st, 2022. The shares traded at Rs 547. This gives it a premium of Rs 22 per share over the cap price of Rs 525.

Tamilnad Mercantile Bank IPO Review- Key IPO Information

Promoters: The Bank is a professionally managed bank and does not have an identifiable Promoter. 

Book Running Lead Managers: Axis Capital Limited, Motilal Oswal Investment Advisors Limited, and SBI Capital Markets Limited.

Registrar To The Offer: Link Intime India Private Limited.

The Objective of the Issue

The net proceeds from the issue will be utilized for the following purposes:

• To augment the tier-I capital base to meet future capital requirements.
• Meet offer issue expenses.
• To receive the benefits of listing the shares on the stock exchanges.

In Closing

In this article, we looked at the details of Tamilnad Mercantile Bank Limited IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for the 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.

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 favourite stocks.

The post Tamilnad Mercantile Bank IPO Review – GMP, Strengths, Weaknesses & More! appeared first on Trade Brains.

Adani Power Fundamental Analysis: Over the last two years, Adani Power has given eye-popping multi-bagger returns of 950%. The stock has increased sharply from Rs. 40 per share in August 2020 to Rs. 411 present day. Similarly, various other stocks of Adani Group have zoomed over the last 2-3 years making Gautam Adani the world’s fourth richest person. 

In this article, we will cover Adani Power Fundamental Analysis and also we will take a quick look at the thermal power generation industry and the company’s history. After that, we shall go ahead to understand its business and fundamentals. Later, a section is devoted to a competitive advantage study and a conclusion summarizes the article at the end.

Adani Power Fundamental Analysis – 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.

Despite such good energy production numbers, India’s per capita annual power consumption at 1,276 in FY21 remains even lower than that of other developing countries like South Africa and Brazil. This supports the argument that overall power demand in India is expected to grow at a strong pace.

This increase in demand will be brought by a variety of factors: rising living standards, higher electrical and electronic appliance penetration even across rural areas, more focus of the government on boosting the manufacturing sector’s contribution to GDP growth, construction of data centres and better irrigation through electric pump sets in the agricultural sector.

As we reach the end of the industry overview, let us devote some space to coal-based power generation because APL is primarily in the same industry. As per NITI Aayog’s report, coal-based thermal power generation will grow over the next decade. However, its share of the total power generation composition of India will decrease from 72% at present to 50-55%. 

We have now covered the industry overview as part of Adani Power fundamental analysis. Let us move ahead to read about the company itself.

Adani Power Fundamental Analysis – Company Overview

Adani Power Limited (APL) was set up as a power trading corporation back in 1996. Since then, it has grown organically and inorganically into India’s largest private thermal power producer. As the name suggests, it is a part of the Gautam Adani-led diversified Adani Group.

It set up its first power generation plant at Mundra, Gujarat in 2006. Fast forward to today, Adani Power has four coal plants in Gujarat, Maharashtra, Karnataka and Rajasthan with a power generation capacity of 13,610 MW.  In addition to this, it has a 40 MW solar power plant in Gujarat. It has 5 more upcoming power plants which are under construction as of now.

The power company has a history of following the best corporate sustainability practices. In 2019, it ranked 30th in ESG benchmarking by DJSI-S&P Global. Not only this, APL was the world’s first company to establish a coal-based Supercritical thermal power facility as a part of the Clean Development Mechanism (CDM) of the Kyoto protocol.

Let us now move ahead to look at the numbers side of Adani Power.

Adani Power – Revenue and Net Profit 

Adani Power is one of India’s best companies when it comes to revenue visibility. Out of its total production capacity, 78% is tied up securely via long-term power purchase agreements. Similarly, on the sourcing side, 73% of its domestic coal fuel requirements stand secured through fuel supply agreements.

Now, If we look at the last five years of revenue and net profit numbers, we can say that the revenues of APL have increased at a CAGR of 6.42% every year. However, the bottom line has been volatile with the company reporting losses from 2018 to 2022.

As for the heavy net profit of the year ending 2022, it included recognition of prior period revenue from operations of Rs. 2,970 crores and a prior period other income of Rs. 2,830 crores.

The table below shows revenue and net profit numbers for the previous five years.

Adani Power – Debt/Equity Ratio and Profit Margins

The table below lists the debt-to-equity ratio profit margins of Adani Power for the last five years.

*Negative debt/equity ratio denotes the negative net worth of the company during that year

From the data above, we can conclude that Adani Power is highly leveraged. In addition to financial leverage, being in the power industry exposes it to operational leverage too. Thus, visibility of revenues and stable costs are very important for sustainable profit margins.

We can conclude that profit margins have been volatile for the last five years making it difficult to strongly offer a positive outlook.

However, recent earnings have helped the company to deleverage itself. This gives it an attractive proposition if it is able to report good profit figures in the coming quarters. 

Adani Power – Competitive Advantage

The points below highlight the competitive edge of Adani Power over the other power producers in India.

1. APL has operational expertise in sourcing and managing logistics of 54 MPTA coal and 12 MTPA fly which involves the multi-point operation of handling over 13,000 railway rakes every year.
2. Several Adani Power facilities enjoy locational advantages and strengths giving them easier access to fuel and market connectivity.
3. Its 73% domestic coal requirements stand secured through long-term fuel supply agreements with coal companies.
4. APL is in a good position to safeguard its revenues in the future. As base load demand will grow, installations of thermal power plants will not grow at the same pace because of the focus on renewables. Thus, power distributors will want to have longer power-purchase agreements (PPA)with APL to avoid market risks.
5. Various PPAs of APL have fuel cost-pass through for imported coal. Thus, if prices of imported coal rise, it will not have to bear the loss and the cost will be transferred to power distributors.

Adani Power – Future Plans

We have covered the company, its industry and numbers in detail so far as a study of Adani Power’s fundamental analysis. Let us take a quick look at its future plans.

As discussed earlier, APL has a present operational capacity of 13,650 MW. Furthermore, it has a 1,600 MW capacity under construction which will be used to supply power to Bangladesh. 

In March 2022, APL proposed a merger of its six subsidiary companies into the parent company. The amalgamation will result in an improvement in ROE, better debt market access, and scale economies among other things.

Recently in August, the company decided to buy Chhattisgarh-based DB Power for Rs. 7,017 crores. DB Power owns and runs a 2×600 MW thermal power plant. This will give Adani Power an added capacity and access to long and medium-term power purchase agreements for 923.5 MW of DB Power.

Adani Power – Key Metrics

The table below lists the key metrics of Adani Power.

In Conclusion

We are at the end of our article on Adani Power Fundamental Analysis.

Despite revenue visibility, the earnings of Adani Power stay volatile because of weak coal production and the rising cost of imported coal. Furthermore, even with long-term power purchase agreements in place, we can not blindly rule out the fact that debt is at alarming levels.

Therefore investors of Adani Power should approach the company with caution. They must keep a close check on the coal prices and earnings of Adani Power to make sure the company can meet its debt obligations. 

In the last year, Adani Power has given multi-bagger returns of 432% to its shareholders. Will it be able to sustain its rally? They say the time has all the answers in the market. Till then, keep saving and keep investing.

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 favourite stocks.

The post Adani Power Fundamental Analysis – Financials, Future Prospects & More appeared first on Trade Brains.

Best Penny Stocks in India 2022: The stock market is known to make the lucky few millionaires over decades, years, and sometimes even months.

Ace investors like Warren Buffet are known to produce average returns of 30%, but what makes them special is that they have managed to do so for over 5 decades.

But on the other hand, there also exist stocks that have given multifold returns in just a short period of time.

Take the example of IKAB Securities and Investments the stock had increased from Rs. 39 to Rs. 930 giving up to 2460% returns when it touched it peak

These are the kind of stocks that one dreams of adding to his/her portfolio. However, the stock market has a section that is specific to only these stocks where such dream returns are sometimes possible called Penny stocks.

In this article, we take a look at the Top Penny Stocks that could turn out to be multibaggers in the near future. Keep Reading to find out!

What are Penny Stocks?

Penny stock is a term used to describe stocks that trade at single or double digits and at the same time have a low market capitalization.

These stocks have a lot of potentials to give multifold returns as their low valuations currently allow it. It is easier for Rs. 100 cr company to double its valuation than for Reliance an Rs. 1,622,823 cr company to double its valuation.

And hence this potential attracts a lot of investors but it is noteworthy that these companies bring with them a lot of risks and are generally avoided particularly for their volatility.

Often most of the penny stocks have proven to be wealth destroyers with only a selected few turning out to be multibaggers.

Our Top Pick for Best Penny Stocks in India for 2022

Best Penny Stocks in India 2022 #1 – Auro Labs

Founded in 1989, Auro Laboratories manufactures APIs and specializes in diabetes therapy. They also undertake custom manufacturing of API’s and intermediaries on a contract basis.

Some of their key APIs include Metformin Hydrochloride, Chlorzoxazone, and Chlorphenamine Maleate. Here Metformin Hydrochloride accounts for 90% of its income.

The company has only one manufacturing unit located in Tarapur which has a 500-tonne capacity. Its products are exported to countries like Egypt, Germany, Malaysia, Singapore, South Africa, Brazil, Spain, and the United Kingdom.

The company currently has a Mcap of Rs. 47.1 crores and its shares trade at Rs. 75.6. The company’s revenues have increased continuously from Rs. 27 cr in 2018 to Rs. 54 crores in 2021. Although the revenues of the company have come down to Rs. 50.87 crores in FY22.

Although the company’s net profit has reduced by more than 50% in FY22 Its net profit growth for the last 5 years averages to 28%.

The company comes with a high promoter holding of 51.99% with no pledged shares and also has a low debt with a debt-equity ratio of 0.44.

It has a good current ratio of 1.87. Its shares trade at a PE of 25.3 which is slightly overvalued in comparison to the industry PE of 23.6

Best Penny Stocks in India 2022 #2 – Generic Pharmasec Ltd

Founded in 1992, Generic Pharmasec Ltd is engaged in the buying, selling, and distribution of pharma, medicinal, and medicated preparation. In addition to this, the company also deals in the securities market. 

Its products include Diagnostic Equipment, pharmaceutical medicinal and medicated preparations, patent medicines, drugs, herbs, etc.

They have tied up with Abbott Point of Care, the USA for the distribution of one of their niche diagnostic equipment called the i-STAT 1 Analyze.

This is a handheld blood analyzer used in ICUs in order to aid them to get immediate test results. Over the next 2 years, the company plans to expand across the 4 metros and also widen its product portfolio. 

The company currently has a Mcap of 108 crores and its shares trade at Rs. 3.91. The company’s revenues have increased from Rs. 38 lakhs in 2018 to Rs. 27.32 crores in 2022. But the company has incurred a net loss of Rs 0.21 crores for FY22.

The company comes with a high promoter holding of 59.96% with no pledged shares and also has zero debt. It also has a good current ratio of 3.43. It however has a negative ROE of 1.17%. 

ALSO READ

Best Penny Stocks in India 2022 #3 – Ashapuri Gold Ornament Ltd. 

Founded in 2008, Ashapuri Gold Ornament Ltd. is engaged in the business of wholesale trading of jewellery. They offer 22-carat gold ornaments.

Its products include choker sets, Toda sets, Pota jewellery, Saloya, bracelets, and other antique jewellery. However, what’s interesting here are their clients.

Ashapuri Golds cater to clients from the high-end market segment to the mid-market value segment. Their client portfolio includes the likes of Malabar Gold, Titan, etc. 

The company currently has a Mcap of 126 crores and its shares trade at Rs. 50.4. The company’s revenues have increased continuously from Rs. 37 cr in 2018 to Rs. 164 crores in 2022.

Its net profit growth for the last 5 years averages 138%. The company comes with a high promoter holding of 62.2% with no pledged shares and also has zero debt. It has a current ratio of 11.5.

Bonus Share

The Below company proves to have good prospects in the industry but did not make the list as it shares trade in triple digits despite being a very small-cap stock.

Ksolves India Ltd. 

Founded in 2014, Ksolves India Ltd. is an IT company engaged in the business of software development, enterprise solutions, consulting, and other IT solutions.

Ksolves designs develop and maintain software systems in addition to creating and modifying existing products in order to improve their functionality!

They provide their services to companies in the Real Estate, E-commerce, Finance, Telecom, and Healthcare sector. The company works on technologies like AI, AR and VR, IoT iOS, and android apps. Their major clients include  

• Onpoint Group
• Sharemeister
• Knight Broadband
• Ekogenio
• CountAbout
• Cut Yeti
• Hardy Nutritionals

In addition to this, the company also has entered into strategic partnerships with Salesforce, Adobe, Odoo, and Drupal Association. In the coming years, the company plans to offer services in AI, Machine learning, Big Data, etc.

They also plan to open onshore delivery centers in North America and Europe. Its promoter holding currently stands at 62.45%. The company has a PE of  32.3 and comes with zero debt. 

In Closing 

These were our top picks for penny stocks however one should always perform their own research before entering these stocks. A note of caution once again, these stocks are inherently riskier than large-cap and mid-cap stocks.

Generally one should not invest more than 5% of his/her portfolio into these stocks. That’s all for this post “Best Penny Stocks in India 2022” Let us know what you think and your favourite penny stocks in the comments below. Happy Investing!

Frequently Asked Questions (FAQs)

1. Which are the best penny stocks to buy in India?

Some of the best penny stocks that you can buy in India are Sinclairs Hotel & Resorts, Zee Media Corporation Limited, Jullundur Motor Agency, Indraprastha Medical Corporation Ltd, and Coffee Day Enterprises Ltd.

However, it is important that you do thorough research before you invest in any of these stocks or get help from your investment adviser.

2. What is the most successful penny stock ever in India?

Some of the most successful penny stocks in India are Eicher Motors (₹9 to ₹2,261), Kotak Mahindra Bank (₹1.8 to 1717.80), Lupin Limited (₹2 to ₹702.80), Titan Company Limited (₹2.6 to 2,390.00), Bajaj Finance (₹2.8 to 6,144 per share) and many others.

Please note that these shares gave huge returns over a number of years and not in short time spans.

3. How do I choose penny stocks?

One of the best ways of choosing penny stocks that have the potential of giving good returns is by doing research about the company.

One can easily find companies that are trading below a given price and then find out businesses that are known if any, and then study these companies to buy a stock.

4. What is the fastest growing penny stock?

Some of the fastest-growing penny stocks are RTCL, Tranway Technologies, Triveni Glass, Orosil Smiths India, Citizen Infoline, Swiss Military Consumer Goods, IL&FS Engineering and Construction, and Tine Agro.

5. Which penny stock is fundamentally strong?

It is important to research companies before investing in them. We may mention a few companies, but information keeps changing from time to time.

Even if a company is fundamentally strong now, things might change in the near future, if something adverse about the company is discovered.

The fundamental strength of the company must be researched before buying/investing in the stock and investors have to stay updated about the companies that they have invested in from time to time.

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 favourite stocks.

The post Best Penny Stocks in India 2022 with Strong Fundamentals! appeared first on Trade Brains.

BPCL vs HPCL: Today every swipe we make we receive updates on the next big things and industries of the future. These include Ev’s, data centers, solar energy, etc.

But are traditional investments like refining still viable? Here we compare BPCL vs HPCL across various metrics. Keep Reading to find out!

Industry Overview – Oil and Gas Industry

Despite being an open fact that the industry will one day be phased out the reliance already makes it an ardent task for the next decade. Instead, the oil demand in India is expected to double to reach 11 million barrels by 2045.

Currently, diesel and gasoline the most used oils are expected to cover 58% of India’s total oil demand. Natural gas in India is expected to have an average annual growth of 9% until 2024. 

Business Overview – BPCL vs HPCL

BPCL

Bharat Petroleum Corporation Ltd. is a state-run oil refinery that has its roots back in the colonial period of 1891. The company is currently under the ownership of the Ministry of Petroleum and Natural Gas.

It is India’s 2nd largest downstream state oil corporation. The company is a Maharatna Public Sector undertaking. Today the company’s businesses include Bharatgas, MAKLubricants, Fuels and Services, Aviation, refinery, etc.

HPCL

This state-run entity finds its roots back in 1910. Today the company is a subsidiary of ONGC which is also under the ownership of the Ministry of Petroleum and natural gas.

The company currently holds a 25% market share amongst Indian public sector undertakings. A lesser-known fact, HPCL was the first PSE to be listed on the BSE.

Their businesses include refining, retail, lubricants, aviation, etc.

ALSO READ

Financial Metrics – BPCL vs HPCL

Revenue

In FY22, HPCL earned a revenue of Rs 3,49,913 Cr and BPCL earned a revenue of Rs 3,46,791 Cr. Since there is a huge difference in the size of the company, comparing their annual revenues would not paint a clear picture.

Here let us take a look at the potential offered by the two companies through their ability to increase revenues over the last few years.

Over the past five years, HPCL has achieved a revenue growth of 13% and BPCL has a revenue growth of 12%. This gives HPCL a slightly better edge than BPCL in terms of revenue growth.

Profitability

In FY22, HPCL and BPCL had an increase in their net profit by 4 times and 5 times. But for FY22, their profits have fallen by 31.6% and 27.73% and their current profitability stands at Rs 7,294 Crs and Rs 11,682 Crs.

Over the past five years, HPCL has a profit growth of negative 3% and BPCL has a profit growth of 4%. This gives BPCL better edge in terms of profitability

Returns and Valuation

As of 2022, HPCL has provided a ROCE and ROE of 18.1% and 11.6% respectively. BPCL  has provided returns of a ROCE and ROE of 20.4% and 15.6%.

The PE for FY22 for HPCL and BPCL stand at 5.24 and 6.54 making them undervalued compared to the PE of the industry

In Closing 

In this article, we compared two very similar companies HPCL vs BPCL on various metrics. While investing in the industry despite many forecasts in its favor, investors must make note of the disruptive nature of electricity and other green energy.

The major determining factor here will be the speed of acceptance of these alternatives across India. That’s all for this post, let us know which company you would pick in the comments below. Happy Investing!

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 favourite stocks.

The post BPCL vs HPCL – A Comparison Of India’s Age Old Refining Giants! appeared first on Trade Brains.

You can now own your favorite companies such as Amazon and  Netflix! Yes, you heard it right! Indian investors like you and me can now invest in US stocks with the ease of sitting in our homes. In this article, we will discuss everything you need to know about investing in US stocks through NSE IFSC!

About NSE IFSC

National Stock Exchange of India Limited (NSE) got approval from SEBI to form an International Financial Service Centre (IFSC) in the Gujarat International Finance Tech City (GIFT). 

Soon after, in November 2016 NSE IFSC Limited (NSE International Exchange) was incorporated. It is a fully owned subsidiary company of NSE.

NSE IFSC offers trading in various products including index derivatives, stock derivatives, currency derivatives, commodities, debt securities, and now US stocks through NSE IFSC receipt.

What is the NSE IFSC Receipt?

An NSE IFSC Receipt is a negotiable financial instrument in the form of an unsponsored ‘depositary receipt’. An unsponsored depositary receipt is issued by a depositary bank without the involvement, participation, or consent of the foreign company.

This provides the investor with an option to trade in fractional quantities when compared to the underlying securities traded in the US markets. 

The holder of the NSE  IFSC Receipt holds the legal title to the  Receipt and has a beneficial interest in the Underlying Share.

For now, The NSE IFSC Receipts are issued by HDFC Bank IBU, in its capacity as the NSE IFSC Receipts’ sole Custodian.  

Can these receipts be converted into shares?

An investor can request the conversion of NSE IFSC Receipts into the underlying share if the NSE IFSC Receipts held by such an investor represent a whole number of Underlying Shares. 

The investor may submit a Cancellation Request to take delivery of the Underlying Shares in the US brokerage account.

Who can invest in US stocks through NSE IFSC?

The following is the categorization made by NSE IFSC:

• A person resident outside India 
• Non-resident Indians 
• An individual resident in India who is eligible under FEMA to invest funds offshore, to the extent allowed in the Liberalised Remittance Scheme of RBI.

Why should you invest in Foreign stocks?

Over the years, US technology stocks have given phenomenal returns to their investors. Some of them are the names that we use on a daily basis. Also, these stocks make it to the list of the world’s best stocks.

Through investing in international stocks, an investor will be able to geographically diversify their portfolio which offers stability. Developed markets are considered less volatile than developing markets.

Apart from that, an investor is also exposed to currency fluctuations in foreign markets. In the case of currency appreciation, the investor’s portfolio will get an additional boost and vice versa. 

Steps to Invest in US stocks through NSE IFSC

To invest in US Stocks you just need to follow these 3 simple steps:

1. Investors will need to open a trading and Demat account with NSE IFSC registered brokers.
2. Next investors will be required to add funds. They can use their local bank account for NSE IFSC registered brokers’ bank accounts. 
3. Once your account is funded, you can start trading in US Stocks.

Tax Implications

Any return generated from the Indian stock market is taxable for the trader or investors. Similarly, trading in US Stocks has certain taxability which is categorized in the following way:

Taxable Events:

• Conversion of US underlying shares into IFSC receipts 
• Requested for Cancellation of IFSC receipts into US underlying stocks 
• Distributions of dividends in cash by U.S. corporations 
• Sale of IFSC Receipts 

Non-taxable:

• Purchase of NSE IFSC Receipts

List of US Stocks on NSE IFSC

Key differences between investing in Indian stocks VS US stocks

In closing   

In this article, we looked at everything that you should know about investing in US stocks through NSE IFSC. It has started with the 8 biggest stocks and has plans to eventually add up to 50 more stocks.

That’s all for this post. Happy Investing! Which US Stock do you want in your portfolio? Let us know 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 favourite stocks.

The post NSE IFSC – Everything You Need to Know About Investing in US Stocks! appeared first on Trade Brains.

Best Stocks Under Rs 500: A good dinner at a nice restaurant can cost anywhere between Rs. 350 to Rs. 500. In a market where stocks cost upwards of Rs. 1,000, what if we told you that can buy stocks under Rs. 500? You can invest by simply eating at home one weekend. Or you can make it a rule to purchase stock under Rs 500 every time you dine out. Investing has never been so effortless.

In this article, we will cover 5 best stocks under Rs 500 with strong fundamentals. Followed by this, we present a compiled list of more such 10 companies. So without further ado, let us move ahead.

Best Stocks Under Rs 500

Best Stocks Under Rs 500 #1 – Wipro Ltd

Wipro was founded 76 years ago in December 1945 by Muhammed Hasham Premji. It was initially set up as a manufacturer of vegetable and refined oils. During the 1970s it changed its focus to emerging IT opportunities in India.

Today Wipro is one of the four Indian IT giants. The other three are TCS, Infosys and HCL Technologies. It caters to more than 1,300 clients around the globe. It employs over 250,000 people and boasts a presence in 66 countries. 

Geography-wise, the USA contributes to more than half of Wipro’s revenues. Sector-wise, banking and financial services makes up the largest segment by garnering a lion’s share of 30% of the company’s turnover.

Despite being so old, Wipro has a high promoter holding of 73%. 

Best Stocks Under Rs 500 #2 – Adani Power Ltd

Adani Power Ltd., a subsidiary of Adani Group is involved in the business of thermal power production. It is India’s largest private thermal power producer with a capacity of 12,450 MW. Adani Power has plants in Gujarat Maharashtra, Karnataka, Rajasthan and Chhatisgarh. It started as a power trading corporation in 1996. 

The company has 5 more power plants in making that will give it an added capacity of 7,000 MW. It is headed by Anil Sardana who serves as the managing director. Its founder Gautam Adani presently serves as the chairman of the board.

For the year ending March 2022, Adani Power reported its highest ever net profit of Rs. 4,912 crores. It had reported losses in 7 of the last 10 fiscal years. As a result, its share price rocketed. Its stock has given multi-bagger returns of more than 487% in one year to its investors. 

Best Stocks Under Rs 500 #3 – Jindal Steel & Power

Delhi-based Jindal Steel and Power Ltd. (JSPL) is a part of the diversified OP Jindal Group. It is one of India’s leading players in the steel, mining and infrastructure space. JSPL is an integrated steel maker with its own captive coal and iron-ore mines. 

It produces and sells sponge iron, mild steel slabs, rails, mild steel, structural, hot rolled plates, iron ore pellets and coils. It has an iron-making capacity of 10.42 MTPA.

The recent rally in the alloy prices benefited Jindal Steel a lot and helped it to post Rs. 4,012 crores and Rs. 5,753 crores in net profit in FY21 and FY22 respectively. Consequently, the company used the earnings to pare its debt and invest aggressively on capacity expansion. 

It has a high promoter holding of 60.44%. As for its stock returns, it has grown at a CAGR of 24.51%.  

Best Stocks Under Rs 500 #4 – Tata Motors

Tata Motors Ltd. is the automobile arm of the salt-to-software conglomerate Tata Group. It was started in 1945 as a manufacturer of locomotives and other engineering products. The company’s first vehicle was a steam road roller in 1948. Later in 1954, TML rolled out its first truck called TMB 312.

Fast forward to today, the company has a strong global and domestic footprint with its product portfolio spanning all segments. It has grown organically and inorganically over the years. Tata Motors acquired the luxury brands Jaguar and Land Rover from Ford in 2008 and later merged both companies in 2013. 

Even before Covid-19 came, TML was reporting heavy losses. It was losing market share and there were rumours that the management may even sell some divisions. 

However, the company managed the crisis very well and has come out stronger. Tata Motors is presently the EV leader in India. In FY22, TML achieved a 12.1% market share in the domestic passenger vehicle market and an impressive 87% in the electric car market. 

Its stock has rallied almost 4 times from Rs. 120 per share in August 2020 to Rs. 471 the present day.

Best Stocks Under Rs 500 #5 – Emami Limited

The maker of renowned brands such as Boro Plus and Navratna, Emami was founded in the mid-1970s by two childhood friends: Mr R.S. Agarwal and Mr R.S. Goenka. As of today, it is one of the leading personal and healthcare businesses in India. 

Emami houses brands such as BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Mentho Plus Balm, Fast Relief and Kesh King. The company employs more than 3,200 and has operations spread across 60 countries worldwide.

It acquired the ayurvedic hair and scalp business of ‘Kesh King’ in 2015 followed by the acquisition of ‘Creme 21’, a German brand in 2019. Emami recently acquired India’s one of the most famous talcum powder brands ‘Dermicool’.

Revenues of Emami have grown at a CAGR of 4.75% every year since 2018. Talking about the bottom line, its net earnings increased at a pace of 22.27% during the same period. It has very low debt. 

The promoters have slowly increased their stake in the company and presently own 54.27% of the shares. 

List of 15 Best Stocks Under Rs 500

Presented below is a list of companies with share prices less than Rs 500.

In Conclusion

In this article, we covered some of the best stocks under Rs 500 with strong fundamentals. While it is a good method to build investing habits, one should not invest only on the basis of stock price. As an investor, you must conduct your in-depth research with a holistic view of the company.

What is your opinion about the companies which we covered above? How about you let us 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 favourite stocks.

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Dreamfolks IPO Review: Dreamfolks Services Limited is coming up with its Initial Public Offering. The IPO will open for subscription on August 24th, 2022, and close on August 26th, 2022. It is looking to raise Rs 562.10 Crores whole of which will be an offer for sale.

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

About The Company

DreamFolks acts as a service provider between the lounge operators on one side, and banks, card networks, airlines, and corporates on the other end. The company also leverages technology and offers the solution through Omni channels such as App-based access, tracking live benefits on each card. 

DreamFolks covers most of the banks in India, it covers India’s largest private and public sector card issuing companies such as HDFC Bank Limited, SBI Cards, Payment Services Limited, and ICICI Bank Limited.

The company is a key player in the Indian market and currently accounts for more than 80%, of the total lounge traffic in major cities like Bangalore, Mumbai, Cochin, and Ahmedabad to name a few.

Other services of the company include:

• Meet and Assist
• Transit Hotels / Nap Rooms
• Food and Beverages
• Airport Transfers
• Spa
• Door-step Baggage Services

Dreamfolks IPO Review – Financial Highlights

(Source: DRHP of the company)

Dreamfolks IPO Review – Competitors

(Source: DRHP of the company)

Dreamfolks IPO Review –  Industry Overview

The airport lounges have grown steadily in India over the past 5 years.  The Indian Airports average around 2 lounges per airport. The Indian lounge market is expected to grow at four times the current market size and is expected to reach 204 lounges by 2040.

Indian domestic air travel passenger is expected to grow at a CAGR of around 36% and surpass 280 million between 2021-2025. The international Indian air travel market is expected to almost grow at 31% CAGR between 2021-2025. 

(Source: DRHP of the company)

The credit card market grew from around 33 million outstanding cards in Sept 2017 to around 65 million outstanding cards in Sept 2021 at a CAGR of 18.17%. The number of outstanding credit cards in Dec 2021 was 68 million while the number of debit cards issued was 937 Million.

Strengths of the Company

• It is a dominant player that has 100% lounge coverage in India with significant exclusivity for India-issued credit and debit card programs in key locations.
• It accounts for almost 95%-97% of the India-issued debit and credit card-based access to the airport lounges as in FY20.
• Has a strong and long-standing relationship with marquee Clients including global card network providers in India and prominent Indian and global banks and corporates.
• The company has a growing customer base with zero direct cost of acquiring them.
• The company has its own proprietary technology platform that ensures the scalability of the business.

Weaknesses of the Company

• A large portion of their revenue comes from a single source i.e, card issuer financial institutions.
• The business is heavily dependent on the air travel industry. Any event like covid can have an adverse impact on their operations.
• Their business also relies on the Cards that are in circulation and on the issuance of new credit and debit cards.
• The company is potentially near the saturation of Indian markets and is required to expand into the global markets for growth.
• The company is technology driven and is susceptible to cyber-attacks.

Dreamfolks IPO Review – Grey Market Information

The shares of Dreamfolks traded at a premium of 24.54% in the grey market on August 22nd. The shares tarded at Rs 406. This gives it a premium of Rs 80 per share over the cap price of Rs 326.

Dreamfolks IPO Review – Key IPO Information

Promoters: Liberatha Peter Kallat, Mukesh Yadav, and Dinesh Nagpal

Book Running Lead Managers: Equirus Capital Private Limited and Motilal Oswal Investment Advisors Limited

Registrar To The Offer: Link Intime India Private Limited

The Objective of the Issue

The company will not directly receive any proceeds from the Offer and the entire Offer Proceeds will be received by the Selling Shareholders, in proportion to the Offered Shares sold by the respective Selling Shareholders as part of the Offer.

In Closing

In this article, we looked at the details of Dreamfolks IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for the 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.

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 favourite stocks.

The post Dreamfolks IPO Review 2022 – GMP, Strengths, Weaknesses & More! appeared first on Trade Brains.

Adani Ports Fundamental Analysis: The rise of Gautam Adani to the world’s fourth richest person surprises many. The prices of most Adani Group companies have skyrocketed in recent years. One such feather in his cap has been Adani Ports and Special Economic Zone.

Over the last two years, it has given a multibagger return of 130% as the stock rallied from ₹348 to ₹800 per share.

In this article, let us have a look at Adani Ports fundamental analysis. We will take a quick scan of the maritime industry and company history along with its business. Later, a section has been devoted to a competitive advantage study and a conclusion summarises the article in the end. So let’s dive right in!

Adani Ports Fundamental Analysis – Industry Overview

India’s exports of commodities have grown at a CAGR of 6.81% in five years from FY18 ($304 billion) to FY22 ($422 billion). During the same time, the nation’s imports grew annually at a rate of 5.64% from $466 billion in FY18 to $613 billion in FY22. 

Consequently, this leads to the rising share of India in global trade. India’s global trade share increased from 2.10% in 2017 to 2.16% in FY21 as per WTO data. 

Both of these statistics point to the growth of India’s maritime industry. The industry is slowly on track after getting a minor beating during the pandemic-induced lockdown. This was followed by a surge in container prices and disruption in the global container market.

Despite this, the cargo traffic at India’s major and non-major ports grew by 7.2% and 4.1% respectively in FY22. 

We can say that India’s global trade has grown over the last 5 years at a healthy pace. As ports are a window to global trade, their rise directly results in the growth of the maritime sector. The growth is expected to stay strong in the coming years.

The logistics sector is the other sector in which APSEZ operates. In India, only 10% of the logistics industry is organised. Since it requires heavy capital investments, a clear logistics policy will help accelerate growth in the industry.

Let us now move on to understand the company around which the article revolves.

Adani Ports Fundamental Analysis – Company Overview

Adani Ports and SEZ was started more than two decades ago in 1998. By 2013-2014 it became the largest private sector ports company in India. It has a vision to position itself as the world’s largest private port entity.

As of this day, it has a capacity of handling 498 MMTPA cargo. The company operates 3 logistics parks and 12 ports & terminals. In terms of land space, it has 15,000 hectares of industrial land and 4 lac sq ft of warehousing. Adani Ports employs 2,736 individuals with an impressive average tenure of 8 years. 

Its facilities are strategically located pan-India giving the company an integrated and competitive advantage. 

Pan-India strategic presence of Adani Ports and Special Economic Zones Ltd.

Adani Ports Fundamental Analysis – Business Segments

We just got through a quick overview of the company. Now let us move forward to understand its business segments in detail.

With its 12 domestic ports spread across seven maritime states, APSEZ handles almost 1/4th of the cargo movement in the country. Its ports are able to handle even the largest vessels. Along with this, the facilities are equipped to manage different types of cargo: dry, liquid, crude and containers.

In conjunction with the ports business, it also owns three logistics parks in Haryana, Punjab and Rajasthan. It offers a variety of services as part of its logistics offerings such as auto logistics, inland waterways, logistics parks, warehouses and more.

The well-integrated structure of APSEZ gives it a competitive edge over other companies. It also results in more value creation for its clients. The Mundra SEZ in Gujarat is one such fine example. The 8,000 hectares industrial hub offers multiple port infrastructure amenities.

Last but not the least, Adani Ports also operates a large fleet of 23 dredgers providing dredging and reclamation solutions. In simple terms, dredging means decreasing the level of a waterbed (a harbour, river, or another area of water) and reclamation means increasing it. These can be for cleaning purposes, new construction, land formation, etc.

Adani Ports – Revenue and Net Profit Growth

APSEZ outperformed the market in FY22 by registering a growth of 26% in cargo handling. It handled 312 MMT of cargo in FY22 compared to 247MMT in FY21. This is in short contrast to a 5% growth in all-India cargo volume. This gives a picture of the fast growth of Adani Ports and SEZ.

As for its warehousing segment, it added 0.43 million sq. ft. translating into a growth of an impressive 108%.  

The revenues of the port company have consistently grown over the years. It has mostly grown inorganically over the years by acquiring various other ports. For instance, last year the company spent Rs. 14,659 crores to acquire three ports, namely Dighi Port, Krishnapatnam Port, and Gangavaram Port.

Taking a five-year time horizon, its revenues have grown at a CAGR of 7.07%. Its profits have also steadily increased, although at a slower rate of 5.17%. On a year-on-year basis, the topline grew 27% to Rs. 15,934 crores in FY22 while net profit saw a decline of 5.33% to Rs. 4,728 crores.

The table below presents year-wise revenues and net profit of Adani Ports and SEZ for the last five years.

Adani Ports – Operating Profit Margin and Net Profit Margin

The ports industry has higher operating profit margins. Most port operators have more than 55% of operating margin. The consequent net-profit margin depends on the capacity utilization and interest paid on debt. 

Historically, Adani Ports and SEZ have demonstrated healthy operating and net-profit margins. The table below lists the profit margins of APSEZ for the last five years.

Adani Ports – Debt and Returns

Apart from their returns, Adani group companies are famous for one more thing: their debt. Adani Ports and SEZ is not an exception either.

In the table below, we can see that total borrowings have almost more than doubled in the last five years. As for the debt to equity ratio, it has increased but not at a very alarming rate. 

And talking about the return on equity, Adani Ports has a higher return on equity than the return on capital employed because of more debt proportion in the capital. It has remained volatile because of the acquisitions of the company and the subsequent time taken to increase its efficiency. 

Thus we can conclude that APSEZ does have high debt but the management has faith in the earnings to service the debt and interest with the interest coverage ratio of 4.34 for the year ending March 2022.

Adani Ports – Competitive Advantage

There is nothing new about the maritime sector. It has been there for a long time. The profitability of Adani Ports and SEZ begets the question of how APSEZ is different from other port operators in India. 

Technological advancements and increased efficiency helped Indian ports to increase their average output per ship berth. In six years from FY2016 to FY21, the port efficiency increased by 32%. And this increase in asset utilization was primarily led by private port players such as APSEZ. 

Along with this, Adani Ports has done a very fine job of integrating warehousing and industrial zones with the ports business. Thus, at one end we have better efficiency and at another end of the spectrum, the integrated nature of the APSEZ. Thus, these two points put together to give a competitive edge to the company.

Adani Ports – Future Plans

APSEZ invested ₹ 11,400 crores on acquisitions in FY22. Along with this, the company spent ₹ 3,750 crores on organic capital expenditure. 

Recently, the company purchased an inland container depot from Navkar Corporation for ₹ 835 crores. Adani’s acquisitions are in line with the vision of creating an integrated ports and logistics enterprise.

Investors can expect higher earnings in the future years as the turnaround of the recently acquired facilities progresses.

Furthermore, the Indian government has identified 31 port projects for monetisation worth ₹ 14,483 crores for FY22-25. Of these, 13 are planned to be tendered in FY22 and more than 10 in FY23. This hints at another acquisition spree for Adani Ports and SEZ as it is the largest private port player in India.

In addition to this, the company recently partnered with Flipkart to set up a fulfilment centre. This is just one of the many other projects the logistics arm of APSEZ has undertaken.

Thus going forward, we may witness more acquisitions and partnerships from Adani Ports and SEZ in both the segments: ports and logistics.

Key Metrics

We are almost at the end of the article. Let us quickly run through a few figures more.

We can note that:

1. The company maintains a healthy dividend payout ratio meaning the management has confidence in servicing its heavy debt in future through earnings.
2. Net debt to EBIDTA is low from an overall perspective but still well within the guidance provided by the company. 
3. The debt-to-equity ratio is high as the company has used borrowings to finance its acquisitions. 
4. Promoters are very bullish on the business given the promoter shareholding at 66%. Over the last few years, the Adani group has slowly bought back and increased its stake in the ports business.
5. Stock P/E is high but it also incorporates the strength of the company such as healthy return ratios, profit margins and steady growth in revenues & profit.

In Conclusion

Despite high debt levels, the earnings of Adani Ports have grown at a sustainable rate. The stock currently trades at 4.6 times its book value, higher than its five-year average of 3.5x. Thus, it will be interesting to see whether there will be any correction in the future. Or 4.6x of book value will be the new price multiple for the stock.

It is said that time has all the answers in the market. Let us wait and watch. Till then keep saving and keep investing. Let us know what you think about Adani Ports fundamental analysis. Would you invest?

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 favourite stocks.

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A Complete Guide on what is Nifty and Sensex: Have you ever heard of the name Dalal street or the D-Street on any market news channel or financial magazine? I’m sure, you definitely would have heard of it, if you’re even remotely involved in the finance world.

Well, Dalal Street in Mumbai, India is the address of the Bombay Stock Exchange, the biggest stock exchange in India, and several related financial firms and institutions. When the Bombay Stock Exchange was moved to this new location at the intersection of Bombay Samāchār Marg and Hammam Street, the street next to the building was renamed Dalal Street.

In Hindi Dalal means “a broker”. The term “Dalal Street” is used in the same way as “Wall Street” in the U.S., referring to the country’s major stock exchanges and overall financial system.

What is Nifty and Sensex?

In order to understand what is Nifty and Sensex, you need to understand the Indian stock exchanges first. Now, let’s discuss the two major stock exchanges in India i.e the ‘Bombay stock exchange’ and the ‘National stock exchange’ along with their indexes.

1. Bombay Stock Exchange (BSE)

1. Bombay stock exchange is an Indian stock exchange located at Dalal Street, Mumbai, Maharashtra.
2. It was established in 1875 and is Asia’s oldest stock exchange.
3. It is the world’s fastest stock exchange, with a median trade speed of 6 microseconds.
4. As of Feb 2022, 5,246 companies trading on the BSE were worth over Rs 264 Lakh Crore (Rs 26,451,334.95 Cr), as per data available on the exchange.

What is an Index? Since there are thousands of company listed on a stock exchange, hence it’s really hard to track every single stock to evaluate the market performance at a time. Therefore, a smaller sample is taken which is the representative of the whole market. This small sample is called Index and it helps in the measurement of the value of a section of the stock market. The index is computed from the prices of selected stocks.

— SENSEX

Sensex, also called BSE 30, is the market index consisting of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE).

1. The 30 companies are selected on the basis of free-float market capitalization.
2. These are different companies from the different sectors representing a sample of large, liquid, and representative companies.
3. The base year of Sensex is 1978-79 and the base value is 100.
4. It is an indicator of market movement.
5. If the Sensex goes down, this tells you that the stock price of most of the major stocks on the BSE has gone down. If Sensex goes up, it means that most of the major stocks in BSE went up during the given period.

For example, suppose the Sensex is 49,130 today. If Sensex drops to 48,450 tomorrow, it means that the majority of the 30 companies are not performing well i.e. their share price is falling. 

— List of 30 Companies Consisting of Sensex

Here is the Sensex 30 Companies- Constituents of Sensex 30 by Weights – 2022

2. National Stock Exchange (NSE)

The National Stock Exchange (NSE) is the leading stock exchange in India, located in Mumbai, Maharashtra, India. It was started to end the monopoly of the Bombay stock exchange in the Indian market.

1. NSE was established in 1992 as the first demutualized electronic exchange in the country.
2. It was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system that offered an easy trading facility to investors spread across the length and breadth of the country.
3. NSE has a total market capitalization of more than US$ 3.06 trillion, making it the world’s 9th-largest stock exchange as of April 2018.
4. NSE’s index, the NIFTY 50, is used extensively by investors in India and around the world as a barometer of the Indian capital markets.
5. The NSE remained the world’s largest derivatives exchange for the second consecutive year in 2020 in terms of the number of contracts traded.

ALSO READ

BSE and NSE – Why are there two Stock Exchanges in India?

— NIFTY or Nifty 50

Nifty, also called NIFTY 50, is the market index consisting of 50 well-established and financially sound companies listed on the National Stock Exchange of India (NSE).

1. The base year is taken as 1995 and the base value is set to 1000.
2. Nifty is calculated using 50 large stocks that are actively traded on the NSE.
3. The 50 companies are selected on the basis of free-float market capitalization.
4. Here, the 50 top stocks are selected from 24 different sectors.
5. Nifty is owned and managed by India Index Services and Products (IISL)

Also read: Nifty 50 fact sheet

— Nifty 50 Companies – Constituents of Nifty 50 by Weights – 2022

Quick Note: If you want to research more about the fundamentals of these companies, you can go our Stock research and analysis PORTAL here.

Nifty and Sensex Movements Meaning

Sensex and Nifty are both indicators of market movement. If the Sensex or Nifty goes up, it means that most of the stocks in India went up during the given period.  With respect to NIFTY and NSE, we can say that:

1. If the Nifty goes up, this means that the stock price of most of the major stocks on the NSE has gone up.
2. On the other hand, if nifty goes down, this tells you that the stock price of most of the major stocks on NSE has gone down.

The same is true in the case of Sensex. Moreover, when Sensex/Nifty goes high, it shows the economic growth of the country. Else if it keeps declining, it might mean a slow-down or depression.

For example, during the Indian recession of 2008-09, the Sensex fell over 12000 points (-60%). The fall in the Sensex was analogous to the recession. Meaning, that people were selling their shares, and an economic crisis in the country.

Similarly, during the covid19 pandemic, the market crashed by over 33% within a month, which was again in relation to the deteriorating economic scenario in India and the world.

Also read:

• How to Invest in Share Market? A Beginner’s guide
• How to follow Stock Market?
• How to create your Stock Portfolio?
• How to Invest Your First Rs 1,000 in The Stock Market?
• #27 Key terms in share market that you should know

Importance of Market Index

1. The market indexes are the barometer for market behavior. It gives a general idea of whether most of the stocks have gone up or gone down.
2. Often, Market Index is used as a benchmark portfolio performance.
3. It is used as a reflector of investors’ sentiments.
4. Market indexes are used for the sorting and comparison of various companies.
5. Indices act as an underlying for Index Funds, Index Futures, and Options.
6. They are used in passive fund management by Index funds.
7. The index can give a comparison of returns on investments in stock markets as opposed to asset classes such as gold or debt.

If you are new to stocks and want to learn from scratch, here is an amazing 7-day eCourse: HOW TO INVEST IN INDIAN SHARE MARKET. Enroll now and start your share market journey today (It’s FREE) #Happy Investing.

That’s all. I hope this post ‘What is Nifty and Sensex?” is helpful to the readers. Please comment below if you have any doubts. Have a great day and Happy Investing!

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Understanding How is Nifty 50 Calculated: At the start of this new Year 2021, the Nifty touched the new height of  14,000 points for the first time ever. A good sign for the Indian markets as they keep soaring higher. But have you ever wondered how the index value was arrived at? 

Today, we discuss the calculation of one prominent index in Indian markets called the Nifty 50. Here, we’ll discuss How is Nifty 50 Calculated and also look into the constituents of Nifty50. Let’s get started. 

What is Nifty 50?

An Index is basically the stock exchange creating a portfolio of the top securities held by it. Indexes have always played an important role for both investors and companies by offering a reliable benchmark. Investors may use it to compare the performance of the index vs. their portfolio and the management of a company may use it to judge the performance of their company’s stock.

Indexes have also been used as an investment strategy where Investment Managers just set up their fund portfolios to simply track the index in an attempt to gain similar market returns. Indexes play an important role as they also stand in the representation of a country’s market and economy.

Nifty is derived from ‘National’ (National Stock Exchange) and Fifty. The Index was founded in the year 1992 and began trading in 1994. It is owned and managed by the India Index Service and Products (IISL). The Nifty 50 is a broad market index that acts as an indicator of market movements.

As the Nifty 50 includes the biggest Indian companies it captures 65% of the float-adjusted market capitalization of the NSE. It is therefore considered a true reflection of the Indian stock markets.

ALSO READ

What is Nifty and Sensex? Basics of Stock Market Index!

How is Nifty 50 calculated?

The Nifty 50 index is calculated using the Float-adjusted and Market Capitalization Method. This method reflects the total market value of all the 50 stocks in the index relative to the base period. The base period for the Nifty 50 is taken as November 3, 1995.

The First step includes the calculation of the Mcap of all the companies. This represents the total value of all the shares of a company held by investors in the market. 

Market capitalization = (Shares Outstanding) x (Current Price)

The Second step includes multiplying the Mcap with the Investable Weight Factor (IWF). The Investible weight is a factor used to determine the shares available for trading. only considers shares that are available for public trading. This excludes shares held by company promoters, government, shares given to employees, etc.

Free-float Market Capitalization = (Market capitalization) x  (Investable Weight Factor(IWF))

Third Step. Here, the Free Float Market Cap is then multiplied by the weight assigned to the individual stock.

 Therefore the calculation for an individual stock would look as follows

Weighted Free Float Market Cap = (Market Cap) x (IWF) x (Weight)

Fourth Step. We now divide the current market value with its base value from 1995 in order to arrive at the value of the Index. The Current Market Value is the sum total of the Weighted Free-float Market Cap of all the stocks. The Base Market Capital is taken from 1995 which stands at Rs. 2.06 trillion.

Index Value = (Current Market Value/Base Market Capital) * 1000

Meet the Nifty 50 Stocks

Sl No	Company	Industry	Weightage
1	Reliance Industries Ltd.	OIL & GAS	12.94%
2	HDFC Bank Ltd.	FINANCIAL SERVICES	8.55%
3	Infosys Ltd.	IT	7.73%
4	ICICI Bank Ltd.	FINANCIAL SERVICES	7.11%
5	Housing Development Finance Corporation Ltd.	FINANCIAL SERVICES	5.68%
6	Tata Consultancy Services Ltd.	IT	4.89%
7	Kotak Mahindra Bank Ltd.	FINANCIAL SERVICES	3.53%
8	ITC Ltd.	FMCG	3.46%
9	Hindustan Unilever Ltd.	FMCG	2.88%
10	Larsen & Toubro Ltd.	CONSTRUCTION	2.72%
11	State Bank Of India	FINANCIAL SERVICES	2.58%
12	AXIS Bank Ltd.	FINANCIAL SERVICES	2.43%
13	Bharti Airtel Ltd.	TELECOM	2.39%
14	Bajaj Finance Ltd.	FINANCIAL SERVICES	2.08%
15	Asian Paints	CONSUMER DURABLES	1.76%
16	Maruti Suzuki India Ltd.	AUTOMOBILE & AUTO COMPONENTS	1.63%
17	Mahindra & Mahindra Ltd.	AUTOMOBILE & AUTO COMPONENTS	1.51%
18	HCL Technologies Ltd.	IT	1.49%
19	Sun Pharmaceutical Industries Ltd.	HEALTHCARE	1.30%
20	Titan	CONSUMER DURABLES	1.17%
21	Tata Motors Ltd.	AUTOMOBILE & AUTO COMPONENTS	1.07%
22	Power Grid Corporation of India Ltd.	POWER	1.05%
23	Tata Steel Ltd.	METALS & MINING	1.01%
24	NTPC Ltd.	POWER	0.98%
25	Bajaj Finserv Ltd.	FINANCIAL SERVICES	0.96%
26	UltraTech Cement Ltd.	CONSTRUCTION MATERIALS	0.94%
27	Tech Mahindra Ltd.	IT	0.91%
28	Nestle India Ltd.	FMCG	0.90%
29	Wipro Ltd.	IT	0.89%
30	Oil And Natural Gas Corporation Ltd.	OIL & GAS	0.85%
31	JSW Steel Ltd.	METALS & MINING	0.79%
32	Dr. Reddy’s Laboratories Ltd.	HEALTHCARE	0.77%
33	IndusInd Bank Ltd.	FINANCIAL SERVICES	0.75%
34	HDFC Life Insurance Co.	FINANCIAL SERVICES	0.74%
35	Grasim Industries Ltd.	CONSTRUCTION MATERIALS	0.72%
36	Cipla Ltd.	HEALTHCARE	0.72%
37	Hindalco Industries Ltd.	METALS & MINING	0.71%
38	Adani Port and Special Economic Zone Ltd.	SERVICES	0.70%
39	SBI Life Insurance Co.	FINANCIAL SERVICES	0.70%
40	Bajaj Auto Ltd.	AUTOMOBILE & AUTO COMPONENTS	0.70%
41	Divi’s Laboratories Ltd.	HEALTHCARE	0.67%
42	Tata Consumer Products Ltd.	FMCG	0.61%
43	Britannia Industries Ltd.	FMCG	0.59%
44	Coal India Ltd	OIL & GAS	0.56%
45	Eicher Motors Ltd.	AUTOMOBILE & AUTO COMPONENTS	0.56%
46	Appolo Hospital	HEALTHCARE	0.54%
47	Hero MotoCorp Ltd.	AUTOMOBILE & AUTO COMPONENTS	0.51%
48	UPL Ltd.	CHEMICALS	0.49%
49	Bharat Petroleum Corp. Ltd.	OIL & GAS	0.43%
50	Shree Cement Ltd.	CONSTRUCTION MATERIALS	0.37%

ALSO READ

Nifty 50 Companies List – Nifty50 Stocks by Weight (2022)

Closing Thoughts 

The value of the index changes on a real-time basis in relation to changes in the stock price. Over time older companies that fail are replaced by newer companies that satisfy the requirements of the Index. The calculation shown above is restricted to the Nifty. Other Indexes like the Sensex use different base periods, base values, and are computed differently.

The post How is Nifty 50 Calculated – NSE Benchmark Index!! appeared first on Trade Brains.

Best Indian Stock Market Blogs to Follow to Learn Investing: If you are looking for a few best Indian stock market blogs to follow, then you have reached the right place. 

Although there are hundreds of stock investing blogs in India, however, in this post we have hand-picked 7 best Indian stock market blogs that every Indian equity investor should follow. (Quick note: Please read this post till the end as there’s a bonus in the last section of this article).

8 Best Indian stock market Blogs to Follow

1. Trade Brains

Trade Brains was founded by Kritesh Abhishek, an NIT Warangal graduate, in Jan 2017. It is the fastest growing Financial Educational Blog in India with over 42,500+ newsletter subscribers within a year and a half of inception. Trade brains blog is focused to teach stock market investing and personal finance to the DIY (do-it-yourself) Investors.

You can also learn about stock market investing in Trade Brains’ recently launched android mobile app. Here’s the link to download the app on the play store.

2. Get Money Rich (GMR)

Get money rich (GMR) blog is run by Mani (founded in 2008). You can read a number of interesting articles regarding stock investing, mutual funds, real estate, income tax, personal finance, etc on this blog.

This blog keeps analyzing new stocks and if you’re a beginner (or even a seasoned investor), you can read these articles to understand how to analyze stocks, which factors to consider and how to find whether a stock is undervalued or overvalued. Here’s a list of a few recent stock analyses by getting a money-rich blog.

Because of it’s simple and easy-to-understand content, it’s one of the best Indian stock market blogs to learn to invest in stocks alongside boosting your additional financial insights.

3. Fundoo Professor

Fundoo Professor is managed by Prof. Sanjay Bakshi. He teaches MBA students (at MDI Gurgaon) two popular courses: “Behavioral Finance & Business Valuation” and “Financial Shenanigans & Governance”. On fundoo professor blog, Mr. Bakshi shares his thoughts as a teacher & practitioner of value investing and behavioral economics.

This blog consists of hundreds of free amazing lessons on investing and human behavior. It’s a great read for Indian investors to build a strong investing foundation.

4. Safal Niveshak

‘Safal Niveshak’ means a ‘successful investor’. This blog is managed by Vishal Khandelwal and Anshul Khare. Vishal has 15+ years of experience as an investor. The Safal Niveshak blog is focused to help small investor, become intelligent, independent, and successful in their stock market investing decisions. They have a newsletter of over 47,000+ subscribers.

You can find many valuable investing lessons on this blog which definitely makes it one of the best Indian stock market blogs.

Also read: 7 Best Stock Market Apps that Makes Stock Research 10x Easier.

5. Nitin Bhatia

Website: https://www.nitinbhatia.in/

This blog is managed by Nitin Bhatia, who covers areas like Investment, Insurance, Stocks, Mutual Funds, Credit Score, Taxation, and Business Start-ups. They also run a YouTube channel with over 290,000+ Subscribers.

6. Stable Investor

Stable Investor is run by Dev Ashish, a SEBI Registered Investment Advisor.

This blog is focused to help people invest sensibly to achieve financial goals, get their personal finances in order, and invest profitably in stocks. Stable Investor has over 11,000+ Newsletter subscribers.

Stable Investor also provides various financial services like financial planning, retirement planning, children’s future planning, etc.

7. Dr. Vijay Malik

This blog is run by Dr. Vijay Malik, a SEBI registered analyst. He has been actively involved in the Indian equity markets since 2006. The articles on his blog attempt to simplify the process of investment decision-making. Dr. Vijay Malik’s blog provides premium services like ‘Peaceful investing’ workshop, stock analysis excel sheet, ebooks, etc.

You can also read the analysis reports of various stocks published on this blog for free making it worth mentioning in our list of best Indian stock market blogs.

Also read: 7 Must Know Websites for Indian Stock Market Investors.

8. Moneyexcel Personal Finance

The blog is the brainchild of Shitanshu Kapadia. Moneyexcel blog spared awareness to people about finance and financial products. This blog has 1800+ articles & it mainly covers vast topics such as the stock market, mutual funds, income tax, credit cards as well as business ideas & career guidance. They also run a YouTube Channel with 12400+ Subscribers.

Bonus: A Few Other Top Stock Market Blogs

9. Groww Blog:

This blog is run by the popular discount broker Groww. They cover the latest financials and stock market articles on a daily basis.

10. Finology Blog:

The articles on the latest financial updates, news, and legal updates in India. The articles cover all components of the stock market.

11. eLearn Markets Blog:

They provide share market news updates, Investment Tips, Commodity News, Stock market education, Derivatives, and insights from advisors by Elearnmarkets.

That’s all for this post. If you think we missed any astronishing blog on our list of best Indian stock market blogs, feel free to comment below. We’ll be happy to include it on our list if it’s worth adding. Cheers!

The post 8 Best Indian Stock Market Blogs to Follow appeared first on Trade Brains.

DLF land grab case is one of the many scams which has not seen a resolution even after a decade. What makes it unique is the involvement of several high-profile names.

Bhupinder Singh Hooda, ex-chief minister of Haryana and Robert Vadra, brother-in-law of Rahul Gandhi and son-in-law of Sonia Gandhi were two such names. Real-estate major DLF Ltd. held the other end of the transaction.

Also known as the Amipur land case, the scam comes with its own unique modus operandi. In this article, we will cover how the case came into the limelight, the full picture, how was it committed, and the present progress.

How did DLF Land Grab Case come in limelight?

The role of Arvind Kejriwal and Prashant Bhushan

In October 2012 an anti-corruption activist by the name of Arvind Kejriwal and his associates accused Robert Vadra of corruption. Later, Arvind Kejriwal would go on to become the chief minister of Delhi.

They alleged that Vadra had acquired at least 31 properties in the national capital region. The properties were worth more than ₹ 300 crores and came with the monetary assistance of DLF Ltd. They said the real-estate company provided unsecured interest-free loans to them.

The methods used by Robert Vadra were a small part of the larger modus operandi of land grab cases which would populate the news in the coming years.

Bhupinder Singh Hooda’s name comes forward

As the investigation carried on, the size and method of the fraud made everyone realize it was not an everyday scam. It would lead CBI to the former CM of Haryana Bhupinder Singh Hooda. Supreme Court judgement on him highlighted how he abused the law against poor farmers for the interests of the builders. 

To have a perspective, consider this: Bhupinder Hooda’s regime licensed 24,825 acres of land during his 10-year tenure as CM from 2004 to 2014. Previous CMs licensed only 8,550 acres of land for 23 years before Hooda’s appointment. 

What was the modus operandi scam?

The Land Acquisition Act, 1894

The Land Acquisition Act of 1894 gave the Haryana Urban Development Authority (HUDA) and Haryana State Industrial Development Corporation (HSIDC) powers to acquire land from the people for ‘public purpose’. ‘Public purpose’ simply means a development in favor of the general public of any region. It can be a highway, a government office or housing for underprivileged people.

Farmers get a notification from the government

The builders would ask the government officials to enforce Section 4 of the act. After this, the poor and illiterate farmers would receive notifications from the government.

The notification stated that the state government is interested in acquiring their agricultural land for ‘public purpose. When the government procures land from the public for such development, it provides a basic compensation rate to the landowners.

At this point, builders would enter the scenario, and persuade the farmers to sell their land to them instead of the government. The prices offered by the builders carried a small premium over the compensation rate offered by the government.

If the farmers resisted, the state would pass Section 6. It was a harsher imposition indicating the government’s intention to acquire the land. Thus farm owners would be left out of the option. In the process, the officials would grant licenses to builders to be the de-facto beneficiaries of the land. The grant of the licenses would entitle the builders to use the agricultural land.

Authorities mark land for commercial/residential development

After either of the methods, the builders would go to the officials and ask them the change the status of the land. The government would tag the land for commercial/residential development from its erstwhile categorization of ‘public purpose’ or ‘agricultural use’.

In the end, the builders would sell the acquired land to other developers or develop it themselves. 

How do Robert Vadra and DLF enter the play?

CAG Report submitted to Haryana Assembly

Comptroller and Auditor General of India submitted its report in the year 2013-2014 in the Haryana Assembly. In the report, the CAG named Robert Vadra’s Skylight Hospitality among other companies that received ‘undue favours’ from the government. The unlawful granting of licenses came at the cost of farmers and the public exchequer. 

The report said, “The department neither at the time of granting in-principle approval nor at the time of formal approval for transfer of licenses ensured that net profit beyond 15% of the total cost accrues to the public exchequer.

This enabled the developers to earn huge profits merely by selling the land while the government had to forego a sizeable amount.”

SN Dhingra Commission to Supreme Court

A committee “Justice SN Dhingra Commission” was formed to investigate the matter. Its report stated that Robert Vadra gained illegal profits of ₹ 50.5 crores from a land parcel in Manesar, Haryana without spending a single rupee. Initially, DLF extended an unsecured advance. Vadra had bought the land for approximately ₹ 7.5 crores. He sold it to DLF for ₹ 58 crores.

The committee submitted its 182-page to Haryana chief minister Manohar Lal Khattar in 2016. It carried a detailed account of Bhupinder Singh Hood’s land deals with mentions of each and every person involved. Later, he forwarded the same to the Supreme Court of India for consideration.

Statements issued by DLF Ltd

As for the DLF, it denied any allegations of wrongdoing. A statement released by the company stated it is a normal practice for the company to provide advances. The company provides unsecured advances to the individuals or entities from which it purchases land. Skylight Hospitality Pvt. Ltd. was one such entity. 

Vadra had also invested with DLF in its project. To this DLF replied that it was also a usual practice. The company said entities would come forward frequently to form a joint venture with the real estate developer.

Another accusation highlighted Robert Vadra’s purchase of apartments constructed by DLF. It stated those transactions were quid pro quo for favours received by DLF Ltd. from the government of Haryana.

To this, the company responded by saying all licenses received from the government were just in nature. The apartment purchases by him were fair transactions. He provided proper monetary consideration at prevailing market prices for acquiring those flats.

What was the outcome of the DLF Land Grab Case?

CBI files 80,000 pages charge sheet

As of today, the Central Bureau of Investigation (CBI) is investigating the case. The premier investigation agency has filed an 80,000-page long chargesheet in Supreme Court. A chargesheet is a detailed document that lists all the charges made against the accused.  

ED attaches assets of Vadra and Hooda

Apart from this, on multiple occasions, ED attached assets of Robert Vadra’s Skylight Hospitality Pvt. Ltd. and Bhupinder Hooda. The Enforcement Directorate (ED) is the law enforcement agency in India responsible for enforcing economic laws and curbing economic crimes in India.

However, the DLF land grab case has reached no conclusion so far. 

What effects did the scam have on DLF stock?

Nevertheless, the early years of the scam uncovering were brutal for DLF stock. Shares falling more than 5% in a single day on any news announcement became commonplace. On one occasion, the stock declined over 8% in a single day wiping out ₹ 1,647 crores of wealth.

During its darkest days in October of 2014, DLF stock lost 40% of its value when the market watchdog SEBI put a ban. It disallowed the real-estate major from issuing equity, debentures or any other security such as REIT for three years. DLF was mired in many controversies over unfair trade practices and the infamous land deals.

We don’t know what will come out of the DLF land grab case. There are over 4.7 crores pending cases in the country with over 25,628 judges. It gets messier when influential people are involved. What we do know is people in positions of authority abused law and influence to the detriment of poor farmers.

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 favourite stocks.

The post DLF Land Grab Case – Modus Operandi, Accused and Outcome appeared first on Trade Brains.

Top Listed Stock Brokers in India: While many sectors witnessed the worst period during the Covid-19 pandemic, the broking industry saw significant growth during the period. 

The growth in the industry was driven by increased retail participation, robust corporate earnings and favourable liquidity in both international and domestic markets. 

In this article, we will look at the Top Listed Stock Brokers in India and also analyse the industry as a whole. Keep reading to find out.

Overview

Increased financial awareness has led to a 130% growth in the Demat accounts openings when the pandemic resulted in a significant meltdown in the stock market. 

Another significant driver for increasing participation in the equity market is technological innovations. Smartphones and affordable data have pushed trading and investing into the digital sphere. 

Also, thanks to the implementation of eKYC and Aadhaar eSign, opening a Demat account has become a paperless and simple process.

In the financial year 2020, an average of 4 lakh Demat accounts were opened every month which has greatly benefited the broking companies. This number further increased to 11.9 lakh in the financial year 2021 and is currently at 28.33 lakh for the current financial year.

The industry is anticipated to generate total revenue of Rs 27,000–28,000 crore in FY22, representing a year-over-year rise of 28–33%, according to rating agency Icra. However, it is anticipated that the pace of revenue growth will slow to 5-7% in FY23 with an anticipated total industry turnover of Rs 28,500-29,000 crore.

What do Broking Companies Do?

The financial brokers give business or individual clients financial assistance. The brokerage sector in India is shifting from a transaction-based to a fee-based one, providing services like wealth management and investment consulting. 

In addition to advising services, a greater emphasis is being placed on fund-based operations, such as margin finance and lending against shares, which enables brokers to generate stable profits.

To assist clients in reaching their goals, financial brokers have improved their marketing skills. They provide a variety of goods and services that improve their rapport with customers.

Top Listed Stock Brokers in India

Listed Stock Brokers in India #1 – ICICI Securities

ICICI Securities is a subsidiary of ICICI Bank Ltd, which began its operation in May 1995 and continues to grow its operation through expanding its client base and providing different types of services.

With a market capitalisation of Rs 14,396 Cr, it is the largest listed broking stock of 2022. The company is diversified into the business of Retail and Institutional Broking, Distribution of financial products, Wealth management and investment banking.

The company has a client base of 7.56 million customers with a CAGR of 16% from FY17-FY22. For the financial year 2022, they had a client acquisition of 2.27 million customers which is the highest ever recorded in a year. 

If we take a look at the financials of the company, it has shown a consistent increase in revenue from Rs 1,861 Cr in FY18 to Rs 3,435 in FY22. Along with the revenue, the company’s profits have also increased from Rs 553 to Rs 1,383 in the same period.

The company has a ROCE of 27% and an ROE of 65% which is really a positive attribute of the company. It also has a PE of 10.4 compared to the industry PE of 25.4 which indicates that the company is undervalued when compared to the industry.

The company’s debt has heavily increased in the last five years. In FY22, its debt stood at Rs 7,846 Cr with a debt to equity ratio of 3.23 which is a major drawback of the company.

In the last two years, the stake of the promoters has been reduced by 4% and currently stands at 74.87%.

Listed Stock Brokers in India #2 – Motilal Oswal Financial Service Ltd 

Motilal Oswal Financial Service Ltd was founded as a small broking sub-unit in 1987. With excellent business practices and the implementation of cutting-edge technology, the company has blossomed into a 9000+ member team.

With a market capitalisation of Rs 11,411 Cr, it is the second largest listed broking stock of 2022. The company has diversified its business portfolio into broking, asset management, wealth management, private equity and real estate segment.

The company is headquartered in Mumbai and has spread across 550 cities and has acquired a customer base of 4.8 million customers as of FY22.

When we take a look at the financial statements of the company we can see that the company’s revenue has increased from Rs 2,751 Cr in FY18 to Rs 4,298 in FY22. The profitability of the company has also increased from  Rs 829 Cr in FY18 to Rs 1,616 Cr in the same period 

The valuation of the company is undervalued compared to the industry with a PE of 8.71 which is a  positive prospect for the company. Although the company’s debt has been increasing, it has maintained a debt to equity ratio of 1.08 which is relatively good for the company.

A slight drawback for the company might be the promoters reducing their stake by 1.16% over the past year. The promoter’s stake currently stands at 69.50%.

Listed Stock Brokers in India #3 – Angel One Ltd

Angel One Limited, formerly known as Angel Broking Limited was incorporated on 8 August 1996 as a private limited company. As of December 31, 2021, it has become the largest listed retail broking house in India in terms of active clients on NSE.

With a market capitalisation of Rs 10,686 Cr, it is the third largest listed broking stock of 2022. It has a diverse range of financial products and service offerings which include broking services, investment advisory, margin trading facility, loan against shares, distribution of third-party financial products and investor education.

The company has achieved a client base of 9.2 million customers in India, which is the largest client base among the listed retail broking houses. it has also acquired a 21.3% market share in the overall equity turnover

If we take a look at the financials of the company, we can notice that the company has noticed significant growth after 2020. The company’s revenue grew from Rs 748 Cr in 2020 to Rs 2,292 Cr in 2022. The net profits of the company have also increased significantly from Rs 114 Cr to Rs 625 Cr in the same period.

Another positive thing about the company is, that it has a ROCE of 35.5% which is the highest among the top companies and an ROE of 46%. The PE of the company stands at 15.6 which means the company is undervalued when compared to the industry.

Though the company has a debt of Rs 1,258 Cr, its debt to equity ratio stands at 0.79 which is a reasonable amount for the company.

Listed Stock Brokers in India #4 – Multi Commodity Exchange of India Ltd

MCX India started its operations in November 2003 under the regulatory framework of the Securities and Exchange Board of India (SEBI). It is the first listed exchange in India.

With a market capitalisation of Rs 6,914 Cr, it is the 7th largest commodity exchange in the world. It is also the first exchange to offer commodity options contracts, bullion index futures and base metals index futures contracts in India.

As of FY22, the company has attained 93.6% market share and has gained a monopoly in its segment. It is spread across 1,018 cities and towns across the country.

If we take a look at the financials of the company, we can see the company’s revenue has dropped from Rs 398 Cr in FY20 to Rs 367 Cr in FY22. The company’s profits have also reduced from Rs 265 Cr to Rs 184 Cr in the same period.

The PE of the company is overvalued at 43.4 when compared to the industry PE of 23. The ROCE and ROE of the company stand at 14.4% and 11.2% which is comparatively low when compared to its peers. Another major drawback is that promoters do not hold any stake in the company.

A significant aspect of the company is that it is almost debt free with a debt-to-equity ratio of 0 and the company has a dividend payout of 61.9%.

list of the 15 top listed stock brokers in India:

In Closing

Without a doubt, the industry has tremendous growth potential due to the vast number of consumers in the country. This is a result of the nation’s sizable 1.3 billion population.

The broking industry has a high potential for growth in the country. But, the investors must also be aware of the challenges the sector may face. These include the seasonality of the stock and the major portion of the market share taken by unlisted players like Upstox and Zerodha.

Let us know what you think about this sector and also your top broking stocks in India picks in the comments below. Happy Investing! 

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 favourite stocks.

The post Top Listed Stock Brokers in India – Overview & Complete list of Stocks appeared first on Trade Brains.

Top Stocks Under Rs 20: The headline reads, “Dolly Khanna’s portfolio penny-stock turns multi-bagger”. Or it may be, “XYZ stock with price less than Rs. 20 per share becomes Rs. 200.” We realise after reading the news that it is no longer a penny stock it was.

You may be a novice investor hoping to buy low-quotation stocks or a value-hunter among small-caps. One thing is clear, such stocks can be a rags-to-riches story.

Though the investor appetite for such fundamentally strong stocks is huge, the availability is in short supply. A quick run on Screener fetches some 1,200 companies trading in the market with a share price of less than Rs. 20 per share.

How do you go about picking profitable companies among this large pool? What filters to use: revenue growth, profitability, debt to equity ratio or what else? 

In this article, we bring to you such strong penny stocks and also top stocks under Rs 20. So without further ado, let us jump in.

Top Stocks under Rs 20

Stocks under Rs 20 #1 – Syncom Formulations

Founded in 1995, Syncom Formulations is a pharmaceutical company based in Mumbai, Maharashtra. It has a state-of-the-art manufacturing plant in Pithampur, Madhya Pradesh. The small-cap pharma company exports its formulations to more than 15 countries and employs approximately 300 people. 

Syncom produces and sells formulations in various dosage forms: tablets, capsules, liquid orals, vials & ampoule injections & dry vial injections, dry syrups, ointments, inhalers, and herbals.

Promoters seem to be bullish on the company as they have increased their stake from 38.98% in September 2019 to more than 50.5% as of June 2022. Its sales have grown consistently since 2018. However, it registered a de-growth of 10.20% in March 2022 in sales at Rs. 220 crores. 

It has a low debt-to-equity ratio of 0.26 and the stock comes at a P/E ratio of 44.

Stocks under Rs 20 #2 – Aakash Exploration Services

Aakash Exploration Services has been in the business of providing various oil and gas field services for the last 25 years. The company is headquartered in Ahmedabad, Gujarat and employs more than 900 people. 

The company has two ISO certifications and one OHSAS certification in its name giving it a brand image and corporate identity. Its list of renowned clients includes ONGC, GSPCL, Cairn, Essar, and more.  

The promoter holding, though high at 66.77% has been reduced by 6.56% from 73.77% in June 2021. Excluding the financial year 2021, the revenues of AES have grown from Rs. 67 crores in FY20 to Rs. 77 crores in FY22. 

Another good thing about the company is that it has reduced its debt over the years and consequently its interest coverage ratio has gone up.

Stocks under Rs 20 #3 – Steel Exchange India 

Steel Exchange India Ltd. or SEIL is an integrated steel maker that produces sponge iron (220.000 TPA), billet & ingots (340,000 TPA), TMT rebars (225,000 TPA) and captive power (71.64 MW). It is a company of the Vizag Profiles Group. The group is primarily in the real-estate sector developing residential properties. 

The steel arm was set up in 1999 as part of the diversification efforts of the business group which used to trade steel and allied products previously. As of today, it operates two steel plants and has a strong brand value for its ‘Simhadri TMT’ bars.

Over the last three years, the small-cap steel manufacturer has scaled its revenues from Rs. 781 crores in 2020 to Rs. 1,099 crores in the year 2022. 

Stocks under Rs 20 #4 – One Point One Solutions

One Point One Solutions is a BPM/BPO services provider with 5,500 employees present across its 8 delivery centres. It provides a variety of services to its clients including customer care, lead generation, facial verification, e-mail management, online chat services, content management, accounts payable & receivable, SMS management and more. 

It has a high promoter shareholding of 70.13% which has remained stable over the last five quarters. As of its revenue growth, it reported a total income of Rs. 132 crores for the year ended March 2022, an increase of almost 30%. With this, the company’s bottom line turned green as it reported a profit of Rs. 3 crores. 

In January this year, the service provider split its shares from Rs. 10 face value to Rs. 2. The shares started trading on an ex-split basis from January 18, 2022.

Stocks under Rs 20 #5 – JCT 

A part of the Thapar Group, JCT Limited traces a long history. It commenced its operations in 1946. 

Fast forward to today, JCT has an integrated textile facility in Punjab with a production capacity of 63 million meters per annum. It has two business segments: cotton, synthetic & blended textiles and nylon filament yarn.

The recent National Technical Textiles Mission to boost manufacturing and export of specific textile products made of man-made fibre is supposed to aid the company’s income.

The company has shown an increasing trend in revenues. But its profitability has declined on a year-on-year basis. This is primarily because of the high material cost it incurred in FY22. The manufacturer has a low promoter holding of 27.25% and almost all of that is pledged. 

But despite that, on an impressive note, the management has worked towards decreasing the leverage by paying back debt.

List of 9 Top Stocks Under Rs 20

We went through five fundamentally good stocks in detail above. The list below presents a few more such companies.

In Closing

In this article, we covered some of the top stocks under Rs 20. Such small-cap companies hold the potential to offer multi-bagger returns. However, they can also result in heavy losses for the shareholders as their stock prices are very volatile. Thus, investors should approach such companies with caution.

As a retail investor, what investment approach do you follow? Do you prefer small-cap companies, mid-cap or large-cap or keep a balance between them? How about you let us know 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 favourite stocks.

The post Top Stocks Under Rs 20 – Financials & Complete List of Stocks appeared first on Trade Brains.

Trident Ltd Analysis: How often do you hear about a mid-cap company whose share price has grown 500% in only two years? Now add to it the fact that it is a household name. You may have its bedsheets at home or there is a good chance that the paper used in your office printers is manufactured by this company. We are talking about Trident Ltd. here.

The rise of Trident is a surprise to many. In this article on Trident Ltd Analysis, we shall cover its history, and get some sense of the industries in which it operates. Later we will move to its fundamentals and see what competitive advantage it has. A conclusion summarizes the article in the end. So without further ado, let us jump in.

History and Company Overview

Trident was set up in 1990 as a yarn manufacturing company. It later entered terry towel manufacturing in the late 1990s. Over the years, the company slowly diversified into the paper, chemical and energy sectors.  

Fast forward to today, Trident is a diversified mid-cap company producing yarn, textiles and paper with a strong global presence in 150 countries across the globe. It has four manufacturing plants in India.

The Ludhiana, Punjab-headquartered company is the largest manufacturer of wheat straw-based paper and terry towels in the world. It employs 15,000 people and has a strong retail and online presence.

The primarily textile company manufactures various products including mats, rugs, quilts, bed sheets, pillows, writing & printing map litho paper, and scritta & offset paper. 

Trident was founded by Mr Rajinder Gupta, a first-generation entrepreneur and Padmashree awardee. He currently serves as the chairman of the company. Mr Deepak Nanda is presently handling the day-to-day affairs of the company as the managing director. He has more than 30 years of experience. 

We now have a good sense of Trident’s history and what it does. Let us quickly understand how big the market is for its products. 

Industry Analysis

The global textile and apparel trade market is expected to touch $1,000 billion in value by 2025. Historically, it has grown at a CAGR of 3% since 2010, barring the Covid-19-led degrowth in 2020. 

In contrast with the global market, India’s domestic textile and apparel market is projected to grow at a CAGR of 10% to $190 billion by 2026. This bodes well for domestic textile manufacturers such as Trident.

As for the global pulp and paper market, the other segment in which Trident operates is estimated to grow at a CAGR of 0.74% from $ 352 billion in 2021 to $ 370 billion in 2029. But the prospects for the Indian paper industry are much stronger. Its average growth is projected at 8-9% every year. 

Growth in the education sector, e-commerce volume surge and growing demand for paper packaging amid the ban on plastics are the major growth drivers in India.  

We can now say that the opportunities for organised players such as Trident are huge in both the industries: textile and paper. Let us now move on to understand its product segments in detail.

Trident Ltd Analysis – Product wise Revenue Segment

Trident has three key revenue streams: bath & bed linen, yarn and paper. Over the last five years, the share of its linen business has risen as a percentage of total revenues while that of yarn and paper has come down. 

Getting to the specifics, in FY18, the revenue split between linen, yarn and paper segments was 48%, 33%, and 19% respectively. This has changed to linen accounting for 58%, yarn for 28%, and paper for 14% in FY22.

Trident Ltd Analysis – Revenue and Net Profit Growth

The total income of Trident grew 54% on a yearly basis from Rs. 4,531 crores in FY21 to Rs. 6,998 crores in FY22. At the same time, its profits grew 2.5 times to Rs. 834 crores from Rs. 304 crores reported a year ago.

On a 5-yr basis, the revenue has grown at a CAGR of 8.95%. Thus we can say that Trident’s main revenue and net-profit growth has happened over the last year only.

Trident has shifted its product strategy over time which has resulted in higher margins and more profitability for the company. Despite its manufacturing base being located in India, you’ll be surprised to know it derives only 32% of its revenue from India.

Rest 41% of its revenue comes from the USA and the remaining 27% comes from the rest of the world. Back in 2018, exports accounted for 55% of the total income for the company.

The table below shows the revenue and net profit growth of Trident over the last five years.

Trident Ltd Analysis – Profit Margins

The effect of increased revenue was clearly visible in the profitability of the company. The textile industry keeps significant operating leverage. As the operating and net-profit margins increased sharply for the company in FY22. 

The table below presents the operating and net profit margins of Trident for the last five years.

Trident Ltd Analysis – Debt, ROCE and ROE

At the end of FY16, the long-term borrowings of the company stood at ₹2,136 crores. Adding its short-term borrowings, the total borrowings off the company amounted to a whopping Rs. 3,503 crores. And this was all being supported by revenues of only Rs. 3,666 crores. 

The company has come a long way since then. Trident’s management has done a fine job of paying back the debt over time. While the revenues have almost doubled in the last six years, the long-term debt of the company was only Rs. 310 crores for the year ending March 2022. 

As for its return on capital employed and return on equity, they have remained volatile during the years. Earlier they were hit by lower capacity utilization. However, a sharp surge in revenues and profits helped the company to establish better return ratios. Consequently, the stock of the company saw a re-rating generating good returns for its shareholders. 

Trident Ltd Analysis – Competitive Advantage

Sharp increase in topline and bottom-line now prompt an explanation. And the answer to the question also highlights the competitive advantage of Trident over its domestic and international peers.

You see after Covid-19 led to supply-chain issues, companies around the world started diversifying their sourcing and manufacturing operations to other countries. They wanted an alternative to China. Nations such as India and Pakistan in addition to Bangladesh and Vietnam emerged as top contenders because of their lower cost of production and lower CO2 emissions. 

Lower material costs and cheap labour aided India to attract textile manufacturing. This benefitted Trident immensely as it already had export-grade capabilities in place.

Changing macroeconomic environment being one reason, Trident’s own structure emerges as the second reason for its outperformance.

Trident’s backward integration of its textile business with its yarn segment provides the company with a cost advantage. Furthermore, the captive power generation by the company keeps its power cost low. This two-pronged set-up helps the textile maker to pass compete aggressively and pass on benefits to its customers in terms of lower prices and better value.

Along with the point mentioned above, Trident has strong brand equity spread across offline retail stores and e-commerce platforms. Its product portfolio, which is spread across the entire market positioning ladder is listed on leading e-commerce platforms in various countries of the world.

Trident Ltd Analysis – Future Plans

Trident has allocated Rs. 1,377 crores towards capital expenditure for growing yarn, sheeting and power generation. Its capacity expansion plans are expected to be completed by September 2023. 

This will help Trident to meet the growing demand in India and capture a larger market share globally.

Trident Ltd Analysis – Key Metrics

We are almost at the end of the article. Let us have a quick look at the key metrics of Trident.

In Closing

Trident has grown immensely over the last year. However, its blockbuster results were already in the making given management’s decision to invest in the previous years. Not long ago, the company was classified as a small-cap stock with its share price below Rs. 10. 

Its stock has given a multi-bagger return of 500% over the last 2 years only. Now, contrast this with 55% of the NIFTY50 during the same period.

It will be interesting to see its growth and stock returns in the years ahead. Will it be able to maintain the same growth? It is said that time has all the answers in the stock market. Till then, keep saving and keep investing. 

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