CMP: Rs 188
Market capitalization: Rs 5,165 crore
Bought by: Axis MF
Relatively attractive valuation, improving demand in automotive industry, rising investments in research and development, and increasing deals with top-notch original equipment manufacturers augur well for software company KPIT Technologies. The company primarily caters to the automotive industry, provides range of software platforms such as invehicle infotainment, vehicle-to-vehicle communication and cyber security across various segments of the automotive industry. The management gave an optimistic guidance regarding its revenue growth which improved its earnings’ estimates. Analysts expect the company to show promising growth in the next one year with likely revenue growth of at least 15 per cent. Also earnings per share (EPS) is likely to grow 25 per cent in the next one year.
Max Healthcare Institute
CMP: Rs 220
Market capitalization: Rs 21,226 crore
Bought by: SBI MF
Besides the qualified institutional placement (QIP), a key factor which has caught fund manager’s attention towards the stock of Max Healthcare is its buying of 42.8 per cent stake in Saket City Hospitals (South Delhi) from Kayak Investments Holding. The company already had 57.2 per cent in Saket City Hospitals. This increase in stake has come at a time India’s healthcare sector is growing given the increasing demand for beds and other ailments associated with the pandemic. The company has 16 healthcare facilities. Analysts estimate that the company is likely to maintain its return on capital employed in the range of 24-25 per cent for the next one year given its strong presence in metros, relatively high free cash flows and improving occupancy levels.
SBI Cards
CMP: Rs 898
Market Cap: Rs 84,450 crore
Bought by: Franklin Templeton MF
An under-penetrated Indian card market with just three cards per 100 population, a strong brand, market share and network of SBI, make this a strong favourite among fund managers. Credit card business is a high margin, high profitability segment compared to any other lending segment. Analysts say yields on revolving /rollover balances is as high as 35-40 per cent while in case of EMI conversion it can go upto 24 per cent. The company is the second-largest in the business with a 19 per cent market share in outstanding cards and 20 per cent in spends. Underpenetration of cards, access to SBIs network of 22,000 branches and a customer base of 45 crore are positives for the company.
Motherson Sumi
CMP: Rs 212
Market Cap: Rs 66,786 crore
Bought by: Mirae Asset MF
With the global auto industry on the cusp of disruption, led by electrical vehicles, autonomous cars, shared mobility and stricter emission norms, fund managers believe these trends have the potential to disrupt the auto supply chain and challenge the existing players. Motherson Sumi, with its product base and market presence, will leverage these trends and ride the next growth wave. Strong management capabilities and improvement in profitability across various divisions is a positive. It company has a vision of $36 billion revenues in 2024-25 with 40 per cent ROCE, with 75 per cent of revenues from automotive industry, 25 per cent from new divisions and 40 per cent of consolidated profit to be paid as dividends.
