Investors searching for an oasis amid volatility in stocks have good options to look at.
Investors searching for an oasis amid volatility in stocks have good options to look at. Shares of select newly-listed companies have been attracting investor interest and rallying despite the ongoing selloff in the market.
They include an asset management company, some chemical players, a housing finance firm and an e-commerce firm. These shares have rallied between 50 per cent and 150 per cent since their listing on the bourses.
Domestic equities have been witnessing strong volatility ever since the July 5 Union Budget amid large-scale desertion by foreign institutional investors (FII) and escalating trade tensions between the US and China.
But these stocks have shrugged off these adversities to rise constantly and reward investors in the process.
HDFC Asset Management | Listing: August 6, 2018 | Return over issue price: 143 per cent
Shares of the company on September 12 scaled its new high of Rs 2,697.50 at the time when the benchmark BSE Sensex is down 8 per cent from its all-time high of 40,312, scaled on June 4 this year.
“A strong parentage and robust track record is the driving force for HDFC AMC with around 15-20 per cent growth in the past 4 years amid consistent rise in asset under management. It is fairly price at this price and we do not foresee much upside post a sharp rise of almost 60 per cent in last 3 months,” said Yogesh Mehta, Founder, Yield Maximiser.
Fine Organic Industries | Listing: July, 2018 | Return over issue price: 102 per cent
This stock traded around Rs 1,580 on September 17 against the issue price of Rs 783. Fine Organic Industries (FOIL) is the largest Indian manufacturer of oleo chemical-based additives and a strong player globally. It produces a wide range of specialty plant-based additives used in the food, polymer, cosmetics, paint, ink, coatings and other specialty application industries. The company’s products fall primarily in two segments including plastic and food.
“We continue to like FOIL’s business model as its presence in oleochemical-based niche products catering industries like plastic, polymer, food emulsifiers and cosmetics offers strong growth opportunity. Present frothy valuations limit upside potential,” Edelweiss Securities said in August.
The company posted 7 per cent and 12 per cent YoY dip in operating profit and net profit at Rs 65 crore and Rs 39.90 crore, respectively, for the quarter ended June 2019.
Aavas Financiers | Listing: October 8, 2018 | Return over issue price: 84 per cent
Affordable housing finance company Aavas Financiers recently hogged limelight after it informed bourses that it has received an investment of Rs 345 crore from IFC, a member of the World Bank Group, through the issuance of non-convertible debentures.
The company (formerly AU Housing Finance) was incorporated in 2011 in Jaipur as retail, affordable housing finance company. It primarily serves low and middle-income self-employed customers in semi-urban and rural areas. A majority of its customers have limited access to formal banking credit. The company’s product offering consists of home loans for the purchase or construction of residential properties and for the extension and repair of existing housing units.
According to Edelweiss Securities, Aavas has all the right ingredients to scale up led by its niche customer profile, prescient investments, excess capital and strong execution capabilities. However, concentrated operations in four states of West India and factors such as increase in regulation by NHB, fall in government incentives for the housing industry or increased competition among players in the housing finance sector could affect Aavas’ business.
IndiaMART InterMesh | Listing: July 9, 2019 | Return over issue price: 75 per cent
IndiaMART is the country’s largest online business-to-business marketplace. According to market experts a large and growing number of buyers and suppliers on the platform are driving up business enquiries, further increasing its attractiveness. As of June 30, the company offers a platform to 88 million registered buyers to search from 62 million products and services, and get connected to over 5.6 million suppliers.
“We are continuously investing in expanding our network, enhancing our technological capabilities and acquiring the best minds from the industry. We are hopeful that these measures would hold us in good stead going forward as well,” said Dinesh Agarwal, Managing Director, IndiaMART InterMESH.
Edelweiss Securities recently initiated coverage of the stock with a ‘Buy’ rating and set the target price at Rs 1,900. “We see value in the stock owing to high entry barriers, network effect-driven pricing power, and negative working capital,” the brokerage said.
Neogen Chemicals | Listing: May 8, 2019 | Return over issue price: 53 per cent
Net profit of the company spiked 92 per cent YoY to Rs 5.49 crore for the quarter ended June 2019. It had reported a net profit of Rs 2.86 crore in the same quarter last year.
The company is a leading manufacturer of Bromine and Lithium-based specialty chemical. It has customers from across multiple industries including pharma, engineering and agrochemical. USA, Europe, Japan and Middle East are the key export geographies of the company.
Mutual fund houses including SBI Contra Fund, Mirae Asset Equity Saving, Axis Mutual Fund, L&T Mutual Fund and Sundaram MF holding together 18.43 per cent stake in the company as of June 2019.