Stock Pick From Electric Utilities & Commercial Vehicles Sector
Sanket Dewarkar / 16 Mar 2017
The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.
ADANI POWER
CMP:Rs.39.55 | BSE CODE:533096 | VOLUME:1534101 | FACE VALUE:Rs.10
Adani Power is engaged in providing electric power generation through coal-based thermal power plants and coal trading. Its business activity is undertaken at Mundra thermal power plant of the company in Gujarat. It has approximately five power projects. Adani Power’s 4620 MW Mundra thermal power plant has created a national record by running continuously for 600 days and generating 4142.56 units of electricity. The share price of the company is forming almost a perfect bullish pattern. On TTM financial basis, Adani Power’s revenue increased by 8.68 per cent to Rs.20481 crore in December 2016. The company’s EBITDA too rose 29.84 per cent to Rs.8554 crore during TTM ending December 2016. Its net profit also boosted more than two times to Rs.705 crore in December 2016. We recommend Buy, with a price target of Rs.44 and stop loss at Rs.36.
ESCORTS
CMP:Rs.520 | BSE CODE:500495 | VOLUME:624666 | FACE VALUE:Rs.10
Escorts is engaged in manufacture of agricultural tractors and construction equipments. On the financial front, Escorts’ revenue increased 17.55 per cent to Rs.3140 crore in 9MFY17, as compared to the same period in the previous financial year. The company’s EBITDA too soared more than double to Rs.242 crore in 9MFY17 on a yearly basis. Its net profit also increased 54.42 per cent to Rs.101 crore in 9MFY17, as compared to the same period in the previous fiscal year. On the segmental revenue front, Escorts has earned 79.22 per cent from agro-machinery products, 12.88 per cent from construction equipments, 5.81 per cent from railway equipments and the remaining 2.09 per cent from auto ancillary products in FY16. The company’s domestic sales increased 28.7 per cent at 4,104 units in March 2017 on a yearly basis. Its total sales surged 29.5 per cent at 4247 units in March 2017, as compared to the same period in previous financial year. We recommend investors to Buy the stock with a target price of Rs.550 and stop loss of Rs.500.
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