Recommendation from Abrasives and Power Generation/Distribution sector

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.

WENDT (INDIA) LTD

CMP - ₹8,718.05
BSE CODE 505412
Volume 36
Face Value ₹10
Target ₹9,300 - 9,800
Stoploss ₹8,270 (CLS)

Wendt India is a leading manufacturer of super abrasives, machining tools and precision components. It is a preferred supplier for many of the automobile, automotive component, engineering, aerospace and defence ceramics’ customers. For the quarter ended December 31, 2022, the standalone net sales of the company rose by 28.73 per cent from December 2021 quarter to Rs 47.31 crore. The EBITDA level stood at Rs 16.63 crore, up by 53.55 per cent from last year’s same quarter. The net profitability of the company shot up by more than 69 per cent from the corresponding quarter last year to Rs 11.45 crore. In line with this good performance, the Board of Directors declared an interim dividend of Rs 30 per share. The company recently announced that it has signed a partnership agreement with Lithoz GmbH, a world leader in ceramic 3D printers and materials. The partnership will help accelerate business in the Indian 3D printing market. Hence, we recommend BUY.

Nava Ltd.

CMP - ₹259.80
BSE CODE 513023
Volume 69,980
Face Value ₹2
Target ₹280 - 290
Stoploss ₹242 (CLS)

Nava Limited, established in 1972 as an Indian ferroalloys manufacturer, is now a multinational corporation with operations in India, South East Asia and Africa. It is a diverse organisation with businesses in metals manufacturing, power, mining agriculture and healthcare. Considering the company’s financial performance, on a consolidated basis it reported a modest decline of 7.36 per cent from Rs 949.92 crore registered in Q3FY22, recording total revenue of Rs 880.01 crore in Q3FY23. When comparing the net profit for the third quarter of FY23 to the same quarter last year, it soared by a significant 45.38 per cent from Rs 168.56 crore to Rs 245.04 crore. The company’s profitability is reflected in healthy levels of ROE and ROCE as well as high EPS. Its other strengths include a low PE ratio and significant promoter holdings. The company’s shares have soared more than 115 per cent over the last year and with a 52-week high of Rs 279.45 on the BSE there is still room for growth in the future. Hence, we recommend BUY.