Please refer to important disclosures at the end of this report
1
Angel Top Picks – November 2022
October witnessed stability – After a strong recovery in month of July and August of
cumulative 12.5%, the Indian markets witnessed profit booking in September and
October months, posting negative returns. More importantly, the FIIs remained net
sellers in October month and MFs continued to remain net buyers. The markets
continued to correct in in the first half of October but in the second half it was nearing
its all-time high levels post cautious commentary regarding the inflation and the
measures to tackle it. Going ahead, we believe that the FIIs will return owing to strong
growth outlook compared to other global nations.
Hawkish commentary by US Fed members led to increased volatility in October– At
the latest FOMC meeting, Federal Reserve Chair, Jerome Powell said that the
FOMC’s primary focus right now is to bring inflation back down to 2%. At the most
recent meeting in November, the FED raised the target range for the federal funds
rate by 75bps to 3.75% - 4.00% and it further intends to increase it to 4.40% by end
of this year.
India's growth recovery continues –Although India’s Q1FY23 YoY GDP growth of
13.5% appears low owing to the impact of the second wave in the base quarter
(Q1FY22), it is pertinent to note that the economy has crossed the pre-pandemic
level. As per data, economic activity is showing signs of broadening and the overall
demand environment is improving leading to moderation in inflation further boosting
positive sentiments. As for high frequency indicators, the PMI Manufacturing was
observed at 55.1 in Sept’22, which continued to remain in line with the last 12-month
average reading. GST collections at ₹1.52 lakh crores in Oct’22, marked the 8th
consecutive month of ₹1.40 lakh crore+ collections.
Falling crude/commodity prices to provide relief – We believe that the current
scenario of a weaker global economic outlook due to recession fears lowers the
chances of a significant spike in crude oil prices which have corrected ~24% over
the period of April’22 to Sept’22. So, the falling crude oil prices are to certainly
benefit the Indian companies which were impacted heavily on the margin front over
the past few quarters. Going ahead, this cooling of commodity prices would not only
prove to be tailwinds but also aid in containing overall inflation and spur demand.
Maintain a positive view from a longer-term perspective – We believe that India is in
a relatively stronger position vs. other Advanced and Emerging economies that are
experiencing high inflation and lower growth. A lower devaluation of our currency
compared to other emerging nation’s currency is also a sign of strength and
resilience in our economy. Moreover, our strong fundamentals and external position
are expected to drive further investments and cushion us from external shocks,
respectively. At current levels, the Nifty is trading at a P/E multiple of 18.5x (Source:
Bloomberg) on rolling one-year consensus earnings, which is near its 5-year average
of 17.2x. Though the upside may be limited in the near term, the long-term prospects
remain intact given the low corporate leverage levels, the better position of financial
institutions, and the revival of the investment cycle in India.
Top Picks Performance
Return Since Inception (30th Oct, 2015)
Top Picks Return
188.10%
BSE 100
111.20%
Outperformance
76.90%
Source: Company, Angel Research
Top Picks
CMP (`)
TP (`)
460
843
238
256
332
485
137
155
1509
1850
616
848
3297
3700
535
700
1047
1192
623
805
630
850
2013
3850
932
1150
186
255
505
600
Source: Company, Angel Research
Note: Closing price as on 07
th
Nov, 2022
Research Analyst:
Purves Choudhari
(purves.chaudhari@angelbroking.com)
November 9, 2022
2
Angel Top Picks – November 2022
Top Picks
November 9, 2022
3
Angel Top Picks – November 2022
Federal Bank
Federal bank is one of India's largest old generation private sector banks.
At the end of Q1 FY’23 the bank had advances of `1.51 lakh cr. And
deposits of `1.83 lakh cr. The bank predominantly has a secured lending
book, which helped limit asset quality issues during the Covid 19
pandemic.
Federal Bank has posted a good set of numbers for Q1FY23 as NII and
Advances increased by 13.1%/16.9% YoY. Provisioning for the quarter
was down by 74% YoY because of which PAT was up by 64% YoY. GNPA
and NNPA ratio improved to 2.69% and 0.94% while restructuring
remained stable sequentially at 2.6% of advances.
Overall asset quality for the quarter improved in Q1FY23, which was in
line with our expectations. We expect asset quality to improve further in
FY2023 given normalization of the economy. We expect the Federal bank
to post NII/PPOP/PAT CAGR of 24.9%/29.1%/42.7% between FY2022-
24 and remain positive on the bank.
Key Finance
Y/E
NII
NIM
PAT
EPS
ABV
ROA
ROE
P/E
P/ABV
March
(` cr)
(%)
(` cr)
(`)
(`)
(%)
(%)
(x)
(x)
FY2023E
7,532
3.1
3,127.6
14.9
97.2
1.3
15.4
9.2
1.1
FY2024E
9,301
3.2
3,846.2
18.3
114.0
1.3
16.1
7.5
1.0
Source: Company, Angel Research
HDFC Bank
HDFC bank is India's largest private sector bank with a loan book of ₹ 13.95
lakh crore in Q1FY2023 and deposit base of ₹ 16.04 lakh crore. The Bank
has a very well spread-out book with wholesale constituting ~57% of the
asset book while retail accounted for the remaining ~44% of the loan book.
Q1FY2022 numbers were below expectations due to change in portfolo mix
towards corporate which resulted in contraction in NIM by 10bps YoY to
4.0%. Moreover, higher opex dragged down PPOP growth. The bank posted
NII/PPOP growth of 14.5%/1.5% for the quarter on the back of loan growth
of 21.6% YoY.
While operating numbers were below expectations, the bank posted an
improvement in asset quality as GNPA/ NNPA reduced by 19/13bps YoY to
1.28% and 0.35% of advances. Restructured advances at the end of the
quarter stood at 0.76% of advances. Given best in class asset quality,
expected rebound in retail credit growth we are positive on the bank given
reasonable valuations at 2.3xFY24, adjusted book which is at a discount to
historical averages.
Stock Info
CMP
137
TP
155
Upside
13%
Sector
Banking
Market Cap (` cr)
29,171
Beta
1.2
52 Week High / Low
139/79
3-Year-Chart
-
20
40
60
80
100
120
140
160
Nov-19
Feb-20
May-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Source: Company, Angel Research
Stock Info
CMP
1509
TP
1850
Upside
23%
Sector
Banking
Market Cap (` cr)
844,328
Beta
1.1
52 Week High / Low
1722/1272
3-Year-Chart
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Nov-19
Feb-20
May-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Source: Company, Angel Research
Key Finance
Y/E
NII
NIM
PAT
EPS
ABV
ROA
ROE
P/E
P/ABV
March
(` cr)
(%)
(` cr)
(`)
(`)
(%)
(%)
(x)
(x)
FY2023E
85,512
4.0
46630
84.1
499.0
2.1
18.2
17.9
2.9
FY2024E
108,523
4.1
59845
107.9
606.0
2.2
19.4
14.0
2.4
Source: Company, Angel Research
November 9, 2022
4
Angel Top Picks – November 2022
AU Small Finance Bank
AU Small Finance Bank is one of the leading small finance banks with Total
Loan AUM of ~50,161Cr. at the end of Q1FY2023. It has a well-diversified
geographical presence across India. AU has a very high exposure to high
margin retail business, which accounted for 90% of its loan book as of
Q1FY2023.
AU continued to report very strong numbers in Q1FY2023 as GNPA/ NNPA
reduced by 243/170bps YoY to 1.96% and 0.56% of advances.
Restructured advances at the end of the quarter also declined to 2.1% from
2.5% of advances sequentially. The bank posted NII growth of 34.8% for
the quarter on the back of strong advances growth of 43.3% YoY while
NIMs for the quarter stood at 5.9%.
We expect AU SFB to post robust NII/PPOP/ PAT CAGR of
31.2%/31.9%/38.8% between FY2022-24 on the back of AUM CAGR of
32%. Reducing cost of funds will also help NIM expansion going forward.
We believe that the worst is over for the bank and expect continued
improvement in asset quality in FY2023, which should lead to a rerating.
Key Finance
Y/E
NII
NIM
PAT
EPS
ABV
ROA
ROE
P/E
P/ABV
March
(` cr)
(%)
(` cr)
(`)
(`)
(%)
(%)
(x)
(x)
FY2023E
4,517
5.5
1701
54.0
263.5
2.1
20.3
11.4
2.5
FY2024E
5,913
5.4
2174
69.0
332.5
2.0
21.1
8.9
1.9
Source: Company, Angel Research
Stock Info
CMP
616
TP
848
Upside
38%
Sector
Banking
Market Cap (` cr)
42,538
Beta
1.2
52 Week High / Low
733/468
3-Year-Chart
-
100
200
300
400
500
600
700
800
Nov-19
Feb-20
May-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Source: Company, Angel Research
November 9, 2022
5
Angel Top Picks – November 2022
Sona BLW Precis.
Sona BLW, one of India's leading automotive technology companies,
derives ~50% of its revenues from Battery Electric Vehicles (BEV) and
Hybrid Vehicles and stands to benefit from the global electrification trend.
Sona BLW has a strong positioning in the Indian Differential Gears market
across PV, CV, and tractor OEMs and it continues to gain market share
globally aided by its combined motor and driveline capabilities. Focus on
R&D is yielding results in new product development, which is likely to aid
further growth.
Sona BLW continues to add new customers and win new orders and its
order book stands at `20,600 Cr which along with its strong financial
profile and expected ~45% earnings CAGR over FY22-24E justifies the
premium multiples of ~45x FY24E EPS.
Key Finance
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
FY2023E
2,915
26.5
451
7.7
21.1
59.7
14.7
11.5
FY2024E
4,066
29.2
739
12.6
29.7
36.5
12.3
8.2
Source: Company, Angel Research
Ramakrishna forg.
Ramkrishna Forgings (RKFL), a leading forging player in India and among
a select few having heavy press, stands to benefit from a favorable
demand outlook for the Medium & Heavy Commercial Vehicle (M&HCV)
industry in domestic and other key geographies in the near term.
The company has phased out its CAPEX over the past few years during
which it was impacted by industry slowdown in certain periods. With the
end to the CAPEX cycle, the favorable outlook in the medium term, and
sufficient capacity in place, we believe RKFL volumes would be able to
post a volume CAGR of 14% over FY22-24E.
RKFL has been able to add new products which have higher value
addition. Better mix along with operating leverage aided ~520 bps YoY
improvement in EBITDA margins in FY22 and are expected to sustain
going ahead.
Key Finance
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
FY2023E
2,688
23.5
261
16.3
19.7
14.5
2.0
1.3
FY2024E
3,074
24.1
339
21.2
21.0
11.2
1.6
1.1
Source: Company, Angel Research
Stock Info
CMP
460
TP
843
Upside
83%
Sector
Auto
Market Cap (` cr)
26,902
Beta
1.3
52 Week High / Low
839/453
14-Month-Chart
-
100
200
300
400
500
600
700
800
900
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Source: Company, Angel Research
Stock Info
CMP
238
TP
256
Upside
8%
Sector
Auto
Market Cap (` cr)
3,832
Beta
1.2
52 Week High / Low
244/146
3-Year-Chart
-
50
100
150
200
250
300
Nov-19
Feb-20
May-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Source: Company, Angel Research
November 9, 2022
6
Angel Top Picks – November 2022
Suprajit Eng.
Suprajit Engineering (SEL) is the largest supplier of automotive cables to
the domestic OEMs with a presence across both 2Ws and PVs. Over the
years, SEL has evolved from a single product/client company in India to
have a diversified exposure which coupled with its proposition of low-cost
player has enabled it to gain market share and more business from
existing customers.
SEL overall has outperformed the Indian Auto industry in recent years
aided by market share gains as well as commercialization of new
products. The company believes that consolidation of vendors and new
client additions would help in maintaining the trend of market/wallet
share gains.
SEL has grown profitably over the years and as a result, it boasts a strong
balance sheet (net cash). We believe SEL is a prime beneficiary of a ramp-
up in production by OEMs and its newly developed products for EVs would
support revenues due to higher kit value. Its premium valuations are
justified in our opinion owing to its strong outlook and top-grade quality
of earnings.
Key Finance
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
FY2023E
2,794
14.4
221
16.0
19.2
21.0
3.7
1.8
FY2024E
3,132
14.8
266
19.2
22.8
17.3
4.1
1.7
Source: Company, Angel Research
P I Industries
PI Industries is a leading player in providing Custom synthesis and
manufacturing solutions (CSM) to global agrochemical players. The CSM
business accounted for over 70% of the company's revenues in FY22 and is
expected to be the key growth driver for the company in future.
The company has been increasing it's share of high margin CSM business
driven by strong relationship with global agrochemical players. PI is
leveraging its chemistry skill sets and is looking to diversify its CSM portfolio
to electronic chemicals, Pharma API, fluoro chemicals, etc. which will help
drive business.
We expect PI Industries to post revenue/PAT CAGR of 17%/24% between
FY22-FY24 driven by 20% growth in the CSM business over the next 2-3
years. Moreover foray into new segments like electronic chemicals and APIs
will also help drive growth over next 3-4 years for the company.
Key Finance
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
FY2023E
6,181
23.0
1064
70.0
15.0
47.1
5.7
6.2
FY2024E
7,194
23.8
1299
85.5
15.6
38.6
4.9
5.2
Source: Company, Angel Research
Stock Info
CMP
332
TP
485
Upside
46%
Sector
Auto
Market Cap (` cr)
4,608
Beta
1.3
52 Week High / Low
478/272
3-Year-Chart
-
50
100
150
200
250
300
350
400
450
500
Nov-19
Feb-20
May-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Source: Company, Angel Research
Stock Info
CMP
3297
TP
3700
Upside
12%
Sector
Chemical
Market Cap (` cr)
56,013
Beta
0.9
52 Week High / Low
3699/2334
3-Year-Chart
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Nov-19
Feb-20
May-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Source: Company, Angel Research
November 9, 2022
7
Angel Top Picks – November 2022
Jubilant Ingrev.
Jubilant Ingrevia was formed by spinning off the chemical and life science
ingredients of Jubilant Life Sciences Ltd. The company has a vast array of
products across its three divisions and is one of the top two producers of
Pyridine - Beta and vitamin B3 globally.
The company derives 56% of its revenues from the life science chemicals
division while the specialty chemicals and nutrition & health solution
business account for 28% and 15% of revenues respectively.
At current levels the stock is trading at P/E multiple of ~13.5xFY24 EPS
which is at a significant discount to other chemical companies. Therefore,
we believe that there is value in the stock at current levels and hence rate
it a BUY.
Key Finance
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
FY2023E
5,020
17.0
544
34.2
19.9
15.5
2.9
1.6
FY2024E
5,572
17.4
633
39.7
19.5
13.5
2.4
1.4
Source: Company, Angel Research
HCL Technologies
HCL Tech (HCLT) is amongst the top four IT services companies based out
of India and provides a vast gamut of services like ADM, Enterprise
solutions, Infrastructure management services, etc.
IT services growth of over 2.7% QoQ CC in Q1FY23 which largely broad-
based and due to recovery in Products which grew by 5.1% QoQ CC.
New deal TCV at USD 2.1bn was up by 23% YoY and included many
large deals. Strong deal wins will help drive growth in the services
business, which should make up for the continued softness in the product
business.
At CMP, the stock is trading at a significant discount to the other large-
cap IT companies like Infosys and TCS and offers tremendous value at
current levels given market leader status in Infrastructure management.
Key Finance
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
FY2023E
98,316
22.0
14,028
52.3
21.9
20.0
4.1
2.4
FY2024E
1,08,179
22.6
16,017
59.6
23.7
17.6
3.8
2.2
Source: Company, Angel Research
Stock Info
CMP
535
TP
700
Upside
31%
Sector
Chemical
Market Cap (` cr)
8,850
Beta
1.7
52 Week High / Low
674/401
18-Months-Chart
-
100
200
300
400
500
600
700
800
900
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Source: Company, Angel Research
-
200
400
600
800
1,000
1,200
1,400
1,600
Jul-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Stock Info
CMP
1047
TP
1192
Upside
14%
Sector
IT
Market Cap (` cr)
286,275
Beta
0.8
52 Week High / Low
1359/876
3-Year-Chart
-
200
400
600
800
1,000
1,200
1,400
1,600
Nov-19
Feb-20
May-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Source: Company, Angel Research
November 9, 2022
8
Angel Top Picks – November 2022
Stove Kraft
Stove Kraft Ltd (SKL) is engaged in the business of manufacturing & selling
Kitchen & Home appliances products like pressure cookers, LPG stoves, non-
stick cookware etc. under the brand name of 'Pigeon' and 'Gilma'.
In the Pressure Cookers and Cookware segment, over the last two years, the
company has outperformed Industry and its peers. Post Covid, organized
players are gaining market share from unorganized players which would
benefit the player like SKL.
Going forward, we expect SKL to report healthy top-line & bottom-line growth
on the back of new product launches, strong brand name and wide
distribution network.
Key Finance
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
FY2023E
1,341
8.4
62.6
19.2
14.7
32.5
4.2
1.3
FY2024E
1,582
9.1
86.0
26.4
16.8
23.6
3.5
1.1
Source: Company, Angel Research
Sobha
Company operates in Residential & Commercial real-estate along with
Contractual business. Companies 64% of residential pre-sales come from the
Bangalore market, which is one of the IT hubs in India, we expect new hiring by
the IT industry will increase residential demand in the South India market.
Ready to move inventory and under construction inventory levels have moved
down to its lowest levels. Customers are now having preference towards the
branded players like Sobha Developers.
Company expected new projects/phase spread over 13.53mn sqft across 7
cities. Majority of launches will be coming from existing land banks. Company
having land bank of approx. 200mn Sqft of salable area.
Key Finance
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
FY2023E
3,350
58.0
457.0
48.1
15.6
13.1
1.7
1.9
FY2024E
3,752
59.0
524.0
55.4
16.2
11.4
1.5
1.7
Source: Company, Angel Research
Stock Info
CMP
623
TP
805
Upside
29%
Sector
Others
Market Cap (` cr)
2,143
Beta
0.8
52 Week High / Low
1080/472
17-Months-Chart
-
200
400
600
800
1,000
1,200
Feb-21
Apr-21
Jun-21
Aug-21
Oct-21
Dec-21
Feb-22
Apr-22
Jun-22
Aug-22
Oct-22
Source: Company, Angel Research
Stock Info
CMP
630
TP
850
Upside
35%
Sector
Others
Market Cap (` cr)
5,956
Beta
1.2
52 Week High / Low
1045/480
3-Year-Chart
-
200
400
600
800
1,000
1,200
Nov-19
Feb-20
May-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Source: Company, Angel Research
November 9, 2022
9
Angel Top Picks – November 2022
Amber Enterp.
Amber Enterprises India Ltd. (Amber) is the market leader in the room air
conditioners (RAC) outsourced manufacturing space in India. Amber would
outperform the industry due to dominant position in Room AC contract
manufacturer, increase in share of business in existing customers and new
client additions.
Amber plans to increase revenues from components (by increasing product
offerings, catering to newer geographies, adding new clients) and exports
(already started in the Middle east). In the past 2-3 year, Amber has acquired
companies like IL JIN Electronics, Ever and Sidwal Refrigeration Industries,
which would help in backward integration and also help the company to foray
in different segments like railway, metro and defense.
Going forward, we expect healthy profitability on back of foray into the
Commercial AC segment, entry into export markets, participation in the PLI
scheme.
Key Finances
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
FY2023E
5,522
7.4
208
61.8
16.4
32.5
4.4
1.5
FY2024E
6,850
8.0
304
90.2
18.8
22.3
4.1
1.2
Source: Company, Angel Research
Oberoi Realty
Oberoi Realty is a real-estate company, focusing on the MMR region.
Company having business vertices of residential and commercial real-
estate.
Company has reported a strong set of numbers in Q4FY22, we expect
residential real-estate growth momentum to continue for the next couple of
quarters as in Q1FY23 company has launched Elysian Tower B in Goregon
along with this upcoming launch of Thane in current year.
We have seen good consolidation in across India towards top-10 players.
Top-10 players now holds 11.2% market share as compared to 5.4% in 2017.
We believes that top-10 players will continue to gain market share.
Key Finance
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
FY2023E
3,621
59.0
1502
41.2
12.9
22.5
2.6
8.6
FY2024E
4,055
59.2
1550
42.6
13.1
21.9
2.6
8.2
Source: Company, Angel Research
Stock Info
CMP
2013
TP
3850
Upside
91%
Sector
Others
Market Cap (` cr)
6,815
Beta
0.5
52 Week High / Low
4024/1971
3-Year-Chart
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Nov-19
Feb-20
May-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Source: Company, Angel Research
Stock Info
CMP
932
TP
1150
Upside
23%
Sector
Others
Market Cap (` cr)
34,097
Beta
1.5
52 Week High / Low
1088/726
3-Year-Chart
-
200
400
600
800
1,000
1,200
Nov-19
Feb-20
May-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Source: Company, Angel Research
November 9, 2022
10
Angel Top Picks – November 2022
Devyani Intl.
Devyani International Ltd. (DIL) is Yum! Brands’ largest franchisee in India,
with more than 800 stores including KFC, Pizza Hut and Costa Coffee.
Currently, DIL operates 339 KFC stores, 391 Pizza Hut stores, 50 Costa Coffee
stores in India and balance stores from other brands and from international
locations.
QSR industry is expected to grow ~23% CAGR over FY20-25 which would
benefit the player like DIL. Going ahead, We expect DIL would add 200 stores
per annum (at least 3-4 year) which would drive strong revenue growth.
Lower capex (shifted its strategy to smaller & delivery-focused stores) and
improving store-level economics would boost the operating margin going
ahead. Going forward, we expect DIL to report strong top-line growth &
improvement in operating on the back of aggressive store addition, improving
store unit economics and strong brand.
Key Finance
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
FY2023E
2,990
23.0
258
2.4
27.3
77.4
20.5
5.9
FY2024E
3,947
23.4
410
3.9
30.3
47.7
14.3
5.2
Source: Company, Angel Research
Marico
Marico is one of the major FMCG companies present in hair oil, edible oil,
foods & personal care segment. Major brands include Parachute, Saffola,
Nihar, Hair & Care, Set Wet, Livon & Beardo.
Marico’s products have strong brand recall coupled with an extensive
distribution reach of more than 5mn outlets and direct reach of ~1 million
outlets. Parachut flagship brand gained market share by 170 bps in FY22 &
expected to performance better going ahead.
In the medium term, the company aspires to grow revenue at 13-15% with
8-10% volume growth. Marico has a strong balance sheet along with free cash
flow and higher profitability. We expect Marico to report healthy bottom-line
CAGR of ~11% over FY2022-24E due to better volume growth on the back
of strong brand, wide distribution network.
Key Finance
Y/E
Sales
OPM
PAT
EPS
ROE
P/E
P/BV
EV/Sales
March
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
FY2023E
10,368
17.9
1287
10.2
30.3
49.5
15.3
6.2
FY2024E
11,301
18.8
1478
11.7
28.0
43.2
12.3
5.6
Source: Company, Angel Research
Stock Info
CMP
186
TP
255
Upside
37%
Sector
Others
Market Cap (` cr)
22,306
Beta
1.4
52 Week High / Low
215/135
14-Month-Chart
-
50
100
150
200
250
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Source: Company, Angel Research
Stock Info
CMP
505
TP
600
Upside
19%
Sector
Others
Market Cap (` cr)
65,015
Beta
1.2
52 Week High / Low
566/456
3-Year-Chart
-
100
200
300
400
500
600
700
Nov-19
Feb-20
May-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Source: Company, Angel Research
November 9, 2022
11
Angel Top Picks – November 2022
Stock bought in last 12 Months
Stock
Date
Reco
Price
Marico
14-Jun-22
BUY
498.00
Devyani Intl.
9-Feb-22
BUY
175.00
Oberoi Realty
7-Jan-22
BUY
922
Jubilant Ingrev.
31-Dec-21
BUY
565
HCL Technologies
20-Dec-21
BUY
1,159
Ramkrishna Forg.
13-Oct-21
BUY
244
Whirlpool India
29-Sep-21
BUY
2,299
Lemon Tree Hotel
23-Sep-21
BUY
43.25
Sobha
22-Sep-21
BUY
729.00
Amber Enterp.
14-Sep-21
BUY
3243.00
P I Industries
9-Sep-21
BUY
3,420
Source: Company, Angel Research
Stock sold in last 12 Months
Stock
Date
Reco
Price
Ashok Leyland
5-Sep-22
EXIT
165
Carborundum Uni.
28-Feb-22
EXIT
813
Safari Inds.
10-Feb-22
EXIT
942.00
Lemon Tree Hotel
17-Dec-21
EXIT
47.25
Shri.City Union.
6-Dec-21
EXIT
2,066
Whirlpool India
3-Nov-21
EXIT
2,074
GNA Axles
19-Oct-21
EXIT
1,076
L & T Infotech
27-Sep-21
EXIT
5,950
Bajaj Electrical
24-Sep-21
EXIT
1,499
Dalmia BharatLtd
22-Sep-21
EXIT
2,143
Crompton Gr. Con
14-Sep-21
EXIT
484.00
Sobha
7-Sep-21
EXIT
780
Source: Company, Angel Research
November 9, 2022
12
Angel Top Picks – November 2022
Ratings (Based on Expected Returns: Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
Over 12 months investment period) Reduce (-5% to -15%) Sell (< -15%)
Hold (Fresh purchase not recommended)
Research Team Tel: 022 - 40003600 E-mail: [email protected] Website: www.angelone.in
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