Endurance Tech
Market cap: Rs 19,107 crore
CMP: Rs 1,358
Bought by: Mirae MF
Diversified auto-ancillary company Endurance Technologies, which manufactures brakes, suspension and transmission products used in two-wheelers, three-wheelers and fourwheelers, is expected to benefit from four factors. First, increasing contribution of revenues from its new clients such as Hero MotoCorp, TVS Motors, Hyundai and Kia will boost its revenues in the coming quarters. Second, increasing business from existing clients such as Bajaj Auto and Royal Enfield is another advantage, which will ensure stability in revenue growth. Both these factors improve order inflows. Third, launches of new products are likely to sustain revenue growth for the company. Lastly, impressive financials have also contributed to the high interest of fund managers in the company’s stock. Analysts estimate that the company’s earnings per share in the next two fiscals is expected to increase in the range of 22-57 per cent
Shriram Transport Fin
Market cap: Rs 30,187 crore
CMP: Rs 1,216
Bought by: Kotak Mutual Fund
In the past six months, fleet utilisation levels of vehicles have gone up. Also, collections of vehicle-financing companies have reached pre-Covid levels— it is close to 90 per cent. Demand for financing of small commercial vehicles (SCV) and light commercial vehicles (LCV) has been improving. Analysts point out that as economy opens up cashflows of road transport operators — key borrowers of Shriram Transport Finance — have improved. Besides, rating agency S&P maintained stable outlook ratings on the company, which added to its attractiveness among fund managers. Recent interactions of major companies revealed that in FY22 revenues of vehicle financing companies may show high growth as demand cycle in CV industry has entered growth phase.
Borosil Renewables
Market cap: Rs 3,576 crore
CMP: Rs 275
Bought by: Franklin Templeton
Fund managers are attracted to this small-cap solar glass company as they believe it is a good bet on solar power. The Indian government has a target of having 100 GigaWatt of installed capacity of solar power by 2022 and the company being the only domestic manufacturer of solar glass in India could gain as it is the world’s first manufacturer of 2mm fully tempered solar glass. Analysts estimate spending for renewable power projects will become the largest area of energy spending in 2021. With a capex announcement to increase capacity from 450 tonnes per day to 1,000 tonnes a day by 2023, fund managers believe valuations are attractive
Can Fin Homes
Market cap: Rs 6,603 crore
CMP: Rs 496
Bought by: UTI MF
One of well-placed mid-sized home financing companies, Can Fin Homes is known for its book quality and relatively low non-performing assets (NPAs) in comparison with the industry. Recently, the company’s management said in a media interaction that demand in the affordable housing segment has improved considerably and reached pre-Covid levels. This is reflected in the company’s net interest margin (NIM), which has improved to little over 4 per cent after hovering in the range of 3-3.7 per cent for several quarters. In December, the company’s share price fell by 5.7 per cent. This provided a good opportunity for fund managers to seek fresh exposure in the company’s stock given its strong business fundamentals and financials.
