August series was very good for IT stocks. What kind of rollover will happen for the September series?
This August series was really good. Though the midcap and the smallcaps have corrected a bit, that has provided really good valuations for the good companies. We will see stock or sector rotations taking place. For the next three to four months, IT will definitely play well along with FMCG and banks.
Even Adani Group stocks have started doing very well. What kind of target can one expect on Adani Ports and what is the trigger point?
Adani Ports is a play on economic growth. This company is maintaining a huge amount of ports and terminals in our country. It is one of the biggest players in that sector. In the coming days, as the economic growth improves, import and export will also increase and this will definitely benefit Adani Ports.
The company has also received a letter from Andhra Pradesh Maritime Board intimating the approval of the proposal to acquire around 10.4% stake of GPL from the Government of Andhra Pradesh. The promoter has been increasing its stake from 63.74% to 63.79% which shows the confidence in the company.
The company also likes monopoly in this space and is a beneficiary of increasing imports and exports in India. Adani Ports in the coming days will perform well. I have kept the stop loss at Rs 675 and target levels of Rs 830 in the next four to six months. Right now Adani Ports is available at a very good price at Rs 723. The last high was around Rs 900. I feel it is a very good valuation and a very good pick.
Why do you like Likhitha Infra? What is the trigger over there?
Likhitha Infra is the biggest beneficiary from the investment happening in gas infra space and the government is really taking part in developing and expanding this space in our country. Likhitha Infra is a debt-free company working in the infrastructure space. It’s PAT has grown at 63% CAGR over the last five years and the company has reported good Q1 numbers for FY22, where the PAT was almost at 10x on a year-on-year basis, while sales grew 229%.
The stock was available at Rs 480 on the last high and right now it is available at Rs 356 levels. So valuations are also good. I think it is a very good buy. For Likhitha stop loss will be placed at Rs 310 and the target levels will be Rs 440 for four to six months.
Your last pick Heranba is a recent listing but there have been so many chemical IPOs in the last couple of days. Have you looked at the IPO side of the market as well?
Yes, definitely but the euphoria which was seen in the IPO market has just stopped because the market was also seeing the weaknesses and the sentiments are getting low as we are at the peak levels of the market. But Heranba is the best growth oriented agrochemical stock. It has superb fundamentals with ROC of around 45.3%, ROE of around 36.3%, PE ratio of 0.10x.
The company has been delivering really good profit growth of around 5.59% CAGR over the last five years. The company has 20% market share in DOM pyretheroid and has a presence in the entire value chain. It has posted really good Q1 numbers.
During the investors’ concall with the management, they said that Q2 and Q3 will be even better than Q1 which was already good. So although it is a newly listed company, because of really good fundamentals, I think Heranba will be a really good pick. As of now, stop loss will be placed at Rs 700 and target levels for Heranba will be Rs 900. Currently Heranba is available at Rs 775-776 levels.
