As many as 26.4 million square feet of real estate space was sold in the financial year 2018, registering a 50.1 percent growth over the corresponding period a
For the long term (10-15 years), which shares are good to invest in in 2018?
A. Currently, SpiceJet operates an average of 402 flights daily to 51 destinations, including seven international ones. It has a fleet of 38 Boeing 737NG and 22 Bombardier Q-400s.
India being the fastest growing aviation market in the world at a growth rate of 20% is unprecedented and still only 3% Indians are flying so clearly this sector can grow for many many years to come provided the infrastructure keeps pace.
Through UDAN the regional connectivity scheme, SpiceJet has been awarded 17 proposals and 20 new sectors under the second round of bidding for the Government of India’s UDAN Regional Connectivity Scheme.
The company sees tremendous potential in these routes and expects a lot of revenue coming from these routes.
Spicejet has announced getting into real estate business. A new company named “Canvin Real Estate Private Limited” has been registered in this regard.This would help Spicejet in improving revenues from ancillary businesses.
SpiceJet also signed a memorandum of understanding (MoU) with Japan’s Setouchi Holdings for starting an amphibian plane service in India.
The single pilot, 10-14 seater, amphibian planes have the ability to take off and land from places where there is no other mode of transport available and would, therefore, come handy in a country such as India, which have hitherto remained unconnected due to infrastructure challenges.
Few months back the company launched its new retail venture named SpiceStyle. Initially conceived as an in-flight only service,SpiceStyle, which is a wholly-owned subsidiary of SpiceJet, now exists in the form of an e-commerce portal –.The new venture is expected to further boost SpiceJet’s ancillary revenue income.
Besides, it has tied upto launch an all new brand store.With this partnership, SpiceStyle is all set to enhance its customer reach and engage a wider audience among active online shoppers.
The company reported a 78% year-on year jump in third-quarter net profit to Rs 105.3 crore on the back of yields and capacity growth.
Once a loss making company, spicejet has registered continuous profits in the previous 10 quarters and is expected to perform even better in future under Ajay Singh’s leadership , rising air passenger traffic and the company’s consistent efforts to expand it’s business.
10–15 years from now , spicejet’s share price will definitely be flying high.
B. Megmani Organics is engaged in the manufacture and sale of Pigments and Agrochemicals. Its scope of activities include production of crop protection products such as insecticides, fungicides,herbicides, bio pesticides and plant growth regulators. At present the company exports it’s product to 75 countries ( Africa, Brazil, LatAm, the US, and European countries) .MOL is one of the largest phthalocyanide‐based pigment manufacturer in the world with a global market share of 7% in terms of volume.
Meghmani Organics Ltd consolidated revenue for the quarter came in at Rs. 460.6 crore, registering 11% yoy increase. This was primarily driven by 7% and 25% yoy increase in revenues from Pigment and Agrochemicals segment.EBITDA for the quarter rose by 22.1% yoy to Rs. 126.3 crore with a corresponding margin expansion of 250 bps. EBITDA margin for the quarter stood at 27.4%. This margin expansion was aided by 69% yoy decline in purchase of stock in trade. The PAT for the quarter came in at Rs. 55.1 crore, yoy increase of 69.5%. This was due to 24% yoy decline in interest expenses.
Standalone net profit of Meghmani Organics rose 130.77% to Rs 28.80 crore in the quarter ended September 2017 as against Rs 12.48 crore during the previous quarter ended September 2016.
Return on Capital Employed (ROCE) continues to increase as the company has consistently been reducing debt.
FUTURE PLANS- It involves 3 projects.
1. The first is DICHLORO Chlormethane (CMS) project at GIDC Dahej . The end products of this project is MDC (which mainly used by Pharma and Agro Chemical Industries)and India is currently a net importer of the same.The comapny expects turnover of INR 1.20 billion in FY operations during FY18-19.
2. The Company’s second Project involves 50% capacity expansion of the Caustic Soda Plant .
3. The Company’s third Project is to set up a Hydrogen Peroxide (50%) project of 25,000 million tonnes per annum( MTPA). which also used in Pharma and Agro Chemical Industries. The expansion of the Caustic Chlorine facility, along with Power Plant and Hydrogen Peroxide projects will involve investments to the tune of 4 bn. These are expected to be commissioned by June 2019 and add 3 bn in revenue in the full year of operations.
Upcoming budget is once again expected to give a big boost to Indian Agriculture, and in turn, to the Agrochemicals sector. Meghmani Organics stands to benefit from this.
C. Aksh Optifibre Limited is a leading Indian manufacturer of optical fibre, optical fibre cables, fibre reinforced Plastic rod and a major e-Governance and turnkey service provider. Aksh is one of the largest FRP rod producer with a sizable market share, supplying to most of the major Optical Fibre Cable manufacturers across the globe. The two key raw materials, optical fibre and FRP rod, constituting 70% of cost of optical fibre cables are manufactured in-house. This makes Aksh as one of the most cost effective optical fibre cable manufacturer. Also, Aksh is now the largest FRP rod producer, supplying to all optical fibre cable manufacturers in 56 countries across six continents. Aksh specialize in manufacturing of various optical fibre cables like aerial, duct, armoured, indoor and outdoor FTTH drop cables. Company currently has FRP manufacturing facilities in Reengus (Rajasthan), Dubai at JAFZA and Silvassa. Company is also in a process of setup up another FRP production facility in Jiansu (China).
Company is also one of the largest e-governance service providers in Rajasthan. Aksh has more than 10,000 registered e- mitra kiosks in Rajasthan, covering 33 districts with 276 blocks and 5884 Gram Panchayats. These kiosks provide access to integrated services with eased processes including O.P.D Registration, Medical services, Bills and Recharge, Ticket Booking, National ID/ PAN card and even Passport, Land Records, Micro ATM and many more. Besides, Aksh is in a Banking correspondence contract with Bank of Baroda, to promote banking services. Services comprise of opening of Saving bank, Time Deposit & Recurring Deposit accounts, collection of biometric and demographic details, providing Micro Insurance and processing loan applications.
The company posted some good Q2 numbers on the back of robust order execution and increasing exports sales –
Gross Revenue at Rs. 145 Crore, up by 26% on QoQ basis.
EBIDTA at Rs. 15 Crore, up by 41% on QoQ basis.
PAT at Rs. 5.02 Crore, up by 134% on QoQ basis.
To mitigate the risk from high raw material prices, the company has set up an additional optical fibre capacity in its Bhiwadi plant facility. This will lead to a further increase in the margins.
The company has merged its subsidiary company APaksh broadband Ltd with its parent company Aksh Optifibre Ltd. This initiative shall facilitate better integration, financial strength, tax savings and stronger balance sheet of the amalgamated entity.
Aksh Optifibre is planning to diversify its business in the field of eyewear. The company plans to manufacture ophthalmic lens which will be operational by Q1 2017. Company has set up its ophthalmic lens plant in Kahrani, Rajasthan, with an initial production capacity of 25 million pairs of lens per annum. Given the Indian ophthalmic market demand of 7 lac lens per day and with no other organized player, going forward, company envisions itself as a principal player in the ophthalmic market .This would also include eye checking, optometry, contact lenses and other accessories and to import, export, deal in merchandise related to the eyewear business. Another thing to note here is that there is no listed peer of this company in this segment. Also this being a high margin business there can be significant re-rating of the company in 2018.
The company is also looking to venture in to providing financial technologies like biometric, smart card, magnetic card, EMV Card, one time password, bank pins and development of India’s payment system industry, providing software application, data management, cash management etc.
The company recently launched Emergency LED Bulbs in Rajasthan. The company will soon expand its product portfolio in the LED lighting space to offer a wide range of choices to its consumers. AKSH plans to sell these products through its vast network of over 10,000 Kiosks across all 33 districts of Rajasthan. The company will soon sell these products across the country in the coming months.
The vision of present Indian government towards digitisation and digital economy is a healthy sign for the company’s future. With the commencement of Smart Cities projects developed across various cities in India paired with the Digital India initiative opens up a bunch of opportunities for the company. Expected rollout of 5G will open new horizons and support new applications and new business cases for carriers, including: automotive, smart city, commercial M2M, other revenue streams. IoT and 5G is expected to spur fibre deployment in local areas and backbones. New mobile infrastructure will be expected to deploy extensive fibre and power networks.
All this makes Aksh a good buy for the long term.
D. Pricol Ltd manufactures and sells automotive components and precision engineered products in India and internationally. It has three manufacturing plants in Coimbatore, one in Manesar, one in Pune and one in Rudrapur. Apart from India, the company has each manufacturing unit in Jakarta, Indonesia and Sao Paulo, Brazil and business offices in Tokyo, Singapore, Cologne – Germany and Detroit – USA.
Pricol, on the back of robust revenue growth led by strong order book, expects good momentum in FY18 and the years to come. It is targeting a revenue growth of 20-25 percentage in the next few years in line with the vision to hit its revenue at Rs 3000 crore by 2020 . It is planning to establish greenfield projects in Vietnam and Mexico. The company has very less debt and does not incur huge interest outgo.
The government has announced a rule according to which it is mandatory for all public transport vehicles with six seater capacity to have location tracking devices and emergency buttons.
The new rule, which will come into effect from 1st April 2018, covers all state transport buses and vehicles like school vans, ambulances etc.
The Government is also planning to introduce rules on speed control by requiring vehicles to install speed governors.
Pricol will be a big beneficiary of these regulations because it is already manufacturing these products and is supplying them to OEMs like Tata Motors, JCB and John Deere.
For introducing Electric Water pumps in Indian Market , Pricol announced an exclusive partnership with Dongguan Shenpeng Electronics Co for introducing Electric Water pumps in Indian Market.
The cooling solutions portfolio will include secondary cooling systems for reducing the engine load and optimizing the fuel efficiency, EGR and turbocharger cooling systems for BS-VI applications.
For electric vehicles, the product range will cater multiple cooling solutions for battery, e-motor, electronic controller, air circulations applications etc.This partnership would help the company expand it’s market in India and also enhance it’s revenues.
The valuations at which the Company is quoting are not expensive.
E. Aditya Birla capital-Aditya Birla Capital Limited (ABCL) is one of the largest financial services players in India . It has strong presence across the life insurance, asset management, private equity, corporate lending, structured finance, project finance, general insurance broking, wealth management, equity, currency and commodity broking, online personal finance management, housing finance, pension fund management and health insurance business. Decent growth and great management. Only a few million people have got into insurance product and the numbers are expected to grow steadily in the coming years .
F. JSW ENERGY- JSW Energy Ltd consolidated net profit rose 37% to Rs297 crore in the September quarter from Rs217 crore a year ago.
Total income from operations rose 6% to Rs2,220 crore against Rs2,099 crore in the corresponding quarter of the previous year.The company has also reduced its debt and plans to reduce it further.
The company is working towards developing capability in the renewable energy space and plans to set up 7MW solar power units consisting of 6MW capacity for JSW Cement under long term power purchase agreement and 1MW capacity for JSW Energy’s captive consumption.
The company signed a memorandum of understanding with the Gujarat government for setting up facilities for manufacturing electric cars and storage batteries. This stock seems to be a good long term bet and re-rating is expected in this counter.
G. NBCC has good growth potential accompanied with a solid balance sheet and consistent order inflows.The schemes announced by the government like Sagarmala, Namami Gange, border roads, river interlinking, high speed corridor, eastern peripheral expressway, nuclear programmes will give terrific momentum to infrastructure development. In December got three orders. One is border fencing and road work along Indo-Bangla border in Mizoram and Meghalaya area of Rs 215 crore. Second, there are two government orders of Rs 50 crore each in Chennai and Mangalore. Though the company did not perform as expected in Q2 but the coming quarters might prove to be a turnaround story with the strong order inflows and better execution on behalf of the company.
The stock looks good for the long term.
H. State Bank of India. The stock is available at attractive valuations.With the NPA concerns becoming a thing of the past , efforts to recapitalise banks , rising profits and growing loan book , their future looks promising .
Post merger benefits for SBI-
The increased balance sheet size will enable the bank to obtain better pricing on both internationally sourced funds and domestic deposits, thus helping it lower lending rates and improve its profitability.
The added branch network and customer base will also help it expand reach and enable the lender to rationalise resources across the board.
State Bank of India (SBI), with over 200 year history, is the largest commercial bank in India in terms of assets, deposits, profits, branches, customers and employees.The Government of India is the single largest shareholder of this entity. SBI is ranked among top 50 Global Banks.For men may come and men may go this bank will go on forever.
I. Reliance Industries- Reliance owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications. Reliance is the most profitable company in India,the largest publicly traded company in India by market capitalization . Sky is the limit for this company. The company is growing everyday. This company has never failed its shareholders. Great dividend yield and even a greater balance sheet.With another set of great results and reliance Jio becoming profitable the future looks promising.
This post is for educational purposes.kindly do your own research before investing.