In past 3 months Sensex has corrected a lot from its All Time High of 63583.07 on 01/12/2022 resulting due to many Large Cap and Mid Cap which are currently trading near their 52 weeks Low. Many investors consider this as a panic situation and try to sell out their holdings even by booking losses.
With an intention of reducing the panic situation, a small fundamental analysis for 3 Large cap companies which are near to their 52 Week low is given below:
- Indus Towers (CMP: 142 ,52 Week H/L :231/135, M. Cap: 38,174 Cr., Industry/ Sector: Telecomm Equipment & Infra Services)
As per December 2022 Quarterly results, company’s Net Sales was Rs 6,765.00 crore down by 2.34%, Quarterly Net Loss was Rs. 708.20 crore down by 145.09% and its EBITDA was Rs. 1,275.60 crore down by 66.41% and its EPS was negative i.e., Rs. -2.63 down by 54% compared to December 2021. Company has given negative returns of -23.44% over the last 6 months and -32.77% over the last 12 months. Debtors’ days have also increased from 71.0 to 93.0 days which indicates company is not in a position to repay its debt in near term and most of the brokerage houses have either given Neutral rating or reduced their targets. On the contrary Bharti Airtel has increased its holding to 47.95 % from 24.94 % earlier and company is now focusing on diversifying into new areas like FTTH (Fiber To The Home), Active Maintenance, and Fiber Maintenance which may improve its balance sheet going further. Considering the government’s push in Telecom sector for making India 5G enabled country and company’s healthy dividend payout of 83.0% investors who have already invested in this company can hold for push back rally and till then enjoy dividend earnings from the company and new investors can wait a little bit more for some positive signals from the company and then make fresh entries.
- Wipro (CMP: 367 ,52 Week H/L: 594 / 355, M. Cap: 2,01,217 Cr., Industry/ Sector: IT - Software)
As per FY21, the company caters to ~1,100 customers across the globe and its Top 5 clients contributed to 12% of its revenue. Recently, Wipro has been selected by Menzies Aviation, the world’s largest aviation services company, to transform its air cargo management services. The company also launched “5G Def-i” platform which empowers businesses to seamlessly transform their infrastructure, networks and services. The company has also announced four strategic global business lines (GBLs) to deepen alignment to clients’ evolving business needs to capitalize on emerging opportunities in high-growth segments of the market. As per December 2022 Quarterly results, company’s Net Sales was Rs 23,229.00 crore up by 14.34%, Quarterly Net Profit at Rs. 3,052.90 crore up by 2.83% and its EBITDA was Rs. 5,185.70 crore up by 11.35% and its EPS also increased to Rs. 5.57 compared to December 2021. On the contrary, company has given negative returns of 38.2% due to recession in USA and America and Europe contributes upto 60% & 26% to its Strategic Market units. Considering Good financial performance and fancy in IT sector due to advancement in technologies for faster adoption of 5G technology, AI driven technology in various sectors and BUY and Neutral ratings from various brokerage houses short term investors should stay away from this company and others can hold their investments in this company for a very long-term period and
- Hero Motor Corp (CMP: 2,426 ,52 Week H/L: 2,939 / 2,242, M. Cap: 48,490 Cr., Industry/ Sector: Automobile)
Hero Motor Corp is the world’s largest manufacturer of 2 Wheelers, in terms of unit volumes sold by a single company in a calendar year, for more than 2 decades. The overall market share of the co. in the Indian motorcycle market is 48% and, in the two-wheeler, segment stands at 34 % as of FY22. The company increased the technology quotient in its NEW-AGE SUPER SPLENDOR 125cc which comes loaded with features, such as Full Digital Speedometer with Low Fuel Indicator, Service Reminder and Malfunction Indicator, Bluetooth Connectivity with Call and SMS alerts. As per the reports of March, sold 519,342 units, 15% growth compared to same period in previous year and 53,28,546 units in FY23, registering a healthy growth of 8 % over last year. The company has also forayed into EV segment by introducing VIDA brand with an investment of 420 crore for its EV fleet and has set up nearly 300 charging points at 50 locations across the three cities for public use in Bengaluru, Delhi and Jaipur. It also holds 40% stake in Ather Energy which is currently one of the leading EV brand in the country and along with it the company has also partnered with BPCL to provide charging facility to its customers and reduce the range anxiety of the customers. As per December 2022 Quarterly results, company’s Net Sales was Rs 8,118.33 crore up by 1.31%, Quarterly Net Profit at Rs. 726.03 crore up by 3.17% and its EBITDA was Rs. 1,123.68 crore up by 1.85% and its EPS also increased to Rs. 36.33 compared to December 2021.Though company has posted good financial performance it has given only 1.77% over the last 12 months and its business also affected due to drops in its Exports. The company has also revised its prices for its products appliable from APRIL 1, 2023 which might show a good impact on its balance sheet going further. Considering the faster adaptation of EV backed by FAME scheme of government, good domestic sales, higher dividend yield, good financial performance in past years and BUY ratings from almost all brokerage houses investors already holding shares may hold it for long term period and new investors can make a fresh entry in this company at current price range.
Situation might be panicking for every investor reading this article or our Newspaper and Newsletters but we at Smart Investment will always try to help you in overcoming such situations and Enrich your Investment Journey. Now, 3 more companies will be covered in next week’s article. So, stay connected for further updates.
- Het Zaveri
- info@smartinvestment.in
(Disclosures: At the time of writing this article, author, his clients & dependent family members may have positions in the stocks mentioned above. The author, his firm, his clients or any of his dependent family members may make purchases or sale of the securities mentioned in website. Author may have positions in above stocks so have vested interest obviously in their going up or down as the case may be.
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