Recommendations From Finance Sectors

DSIJ selects two aggressive stock picks in every issue, with a 15 day horizon based upon the bullish trend during that period. For this issue, we are recommending companies from the finance Sector


Rural Electrification Corporation

BSE CODE: 532955                                         

Volume: 1089000                              

Face Value: 10.00

Rural Electrification Corporation, government owned enterprise promotes rural electrification projects across the country. It provides financial assistance to many state electricity boards and various other state government run agencies. The company has higher dividend yield as compared to its peers at 5.8 per cent. Its FY16 net sales increased by 16.9 per cent to Rs. 23471 crores as against Rs 20072 crores in the previous year. Net sales for five years grew at a CAGR of 17.99 per cent. EBITDA surged by 16.2 per cent to Rs 22216 crores from Rs 19120 crores in FY15. REC’s net profits increased by almost 7 per cent to Rs 5628 crores in the current year from Rs 5260 crores in FY15. Major chunk of EBITDA was for paying off higher interest and taxes.

CMP 284.5

BSE Code 511288

Volume 26000

FV 2

GRUH Finance (GRUH) provides home loans to individuals and families for purchase, construction and extension of properties. The company has an arrangement with the Oriental Insurance Company for providing property insurance of the properties mortgaged. On financial front, GRUH’s revenue increased by 20.89 per cent to Rs 1275 crore in FY16 as compared to previous fiscal year. The company’s EBITDA too rose by 9.22 per cent to Rs 1169 crore in FY16 on yearly basis. Its net profit also increased by 19.52 per cent to Rs 244 crore in FY16 as compared to previous financial year. GRUH is going to declare its Q1FY17 results on July 18. According to company’s management, it is expecting disbursement growth of around 20 per cent to 25 per cent in FY17. On better prospect of financials, we recommend our readers to buy this stock.