Stocks Near to 52 weeks Low - What to do now? (Part - 3)
Post correction in Sensex has correction from its All Time High of 63583.07 on 01/12/2022, recently the Sensex has bounced back a much covering a long gap to its all-time high but still many Large Cap and Mid Cap which are currently trading near their 52 weeks. 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 6 companies i.e., Indus Towers, Wipro, Hero Motor Corp, Tata Power, Affle India and Nykaa were given in previous article available in our newspapers, newsletters and even on our website and application. Now this week we will cover 3 more large cap companies which are near to their 52 Week low is given below:
- Infosys (CMP: 1259 ,52 Week H/L :1672/1185, M. Cap: 5,22,345 Cr., Industry/ Sector: IT Software / IT Consulting & Software)
Infosys is the 2nd largest Information Technology company in India behind TCS which provides consulting, technology, outsourcing and next-generation digital services to enable clients to execute strategies for their digital transformation. Infosys generates 32% of its total revenue from financial services and its Retail, Communication, energy, manufacturing, Hi-tech, Lifesciences and other businesses contribute 15%, 13%, 12%, 11%, 8%, 7% and 3% of its total revenue respectively.Its 62% of business comes from North America and 25% from Europe while only 3% is generated from India. As only 3% business is from India and rest from USA and Europe due to the long going recession the company’s share price is beaten down as its businesses have slowdown from overseas. The company caters to 185 of Fortune 500 companies including companies/ organizations like ICICI Bank, Daimler Mercedes-Benz, HSBC Bank, Goldman Sachs, J&J, Accenture, US Army, US Navy, Lockheed Martin, IBM Corporation, Deutsche Bank and many others. Company’s subsidiary Edge Verve Systems Ltd which contributes~2.5% of revenue is a global leader in AI, Automation and Analytics which helps businesses with their business processes, documents and supply chain and all the three domains are going a very high pace across the globe and its demand is rising each and every year. Recently it signed a MoU with Aramco to boost AI in its human resource technology. Though being adversely affected from recession in overseas the company has reported good results with Net Sales at Rs 37,441.00 crore in March 2023 up by 16%, Quarterly Net Profit at Rs. 6,128.00 crore in March 2023 up by 7.77%, EBITDA at Rs. 9,669.00 crore in March 2023 up by 13.98% compared to same quarter in March 2022. Its EPS also increased to Rs. 14.79 in March 2023 from Rs. 13.56 in March 2022. Considering good financial performance of the company backed by its long-term agreements with marquee clients and futuristic business verticals, the company is good to have in portfolio so those who have already invested in can hold their positions and those who want to make entry then this is the best chance to add this in your portfolio for long term period.
- LIC (CMP: 560 ,52 Week H/L: 949 / 530.05, M. Cap: 3,54,231 Cr., Industry/ Sector: Financial Service / Insurance – Life)
Life Insurance Corporation (LIC) owned by Government of India is the largest insurance provider company in India with a market share of above 66.2% in new business premium. The company offers participating insurance products and non-participating products like unit-linked insurance products, saving insurance products, term insurance products, health insurance, and annuity & pension products. It is ranked fifth globally by life insurance GWP and 10th globally in terms of total assets. It is the largest asset manager in India with an AUM of Rs 40.1 lakh crore as of Dec 2021, which accounts to 17.0% of India's GDP. Its investments in listed equity represented around 4% of the total market capitalization of NSE and more government bonds than the RBI. Though being the largest it is failing to generate returns of retail investors of market. LIC faces significant competition from private insurers as from FY2016 to FY2021, the total premium for private sector players in the life insurance industry increased at a CAGR of 18% while LIC's total premium in India increased at a CAGR of 9% for the same period. LIC debuted in market last year in 2022 with a price band of ₹902 to ₹949 per share but since then it’s been in a continuous down fall washing out the wealth of investors. On the contrary Company has a good return on equity (ROE) track record of 3 Years with ROE of 76.4% and it reported stellar financial performance with Net Sales at Rs 196,957.97 crore in December 2022 up 13.02%, Quarterly Net Profit at Rs. 6,334.20 crore in December 2022 up 2596.4% and its EBITDA at Rs. 10,623.80 crore in December 2022 up 8110.05% compared to same quarter in December 2021. It is a zero-debt company and dividend paying company with promoter holding of 96.5% and good valuations, considering this investor who are still invested in LIC may have to hold their positions for very long-term period and those who want to make fresh entry are having a good chance of investment for long term period.
- GR Infra (CMP: 1006 ,52 Week H/L: 1,570.00 / 930.00, M. Cap: 9,731.27 Cr., Industry/ Sector: Construction)
GR Infraprojects Ltd is an integrated road Engineering, Procurement, Construction company (EPC) with experience in the design and construction of various road/highway projects across 16 States in India and has designed and constructed over 100 road projects. As on 31st March 2022, the order book of the Company stood at Rs 13,100 cr which comprises of 14 road EPC projects, 12 HAM projects, and 3 Railway projects. Its 2.5 times offers good revenue visibility over the medium term. Recently it has diversified into projects in the railways/metro and power transmission sector considering the growth in those sectors. The company got listed on July 19, 2021, with a 105% premium over the issue price. GRIL has a track record of completing projects ahead of schedule and in FY22 the company has been awarded 10 projects with combined order value of ~ Rs. 9,350 Crores including 8 HAM Projects, 1 metro project and 1 was power transmission project. It got listed on July 19, 2021, with a 105% premium over the issue price but in past 1 year it has corrected a lot and generated negative ROE of -31.5 %. Its Debt-to-Equity ratio is 0.95 which is almost in line with the peer companies. It has a low PE of 7.25 and high ROCE of 16.33 compared to peer companies. It generates 90% of revenue from orders books of central government agencies out of which 89% of orders are from NHAI. Recently, GR Infraprojects has bagged orders for 'six laning of Surat-Nashik-Ahmednagar-Solapur-MH/KNT border greenfield stretch in the State of Maharashtra, a Rs 737.17 crore bid for the construction of a four-lane highway in Kausambi, Uttar Pradesh and construction of 4/6 Lane Bypass for Belagavi City in the state of Karnataka with a project cost of Rs 897.37 crore. Company reported Net Sales at Rs 2,191.88 crore in December 2022 up 10.72%, Quarterly Net Profit at Rs. 323.65 crore in December 2022 up 122.47% and its EBITDA stands at Rs. 612.24 crore in December 2022 up 58.38% compared to same quarter in December 2021. Its EPS has increased to Rs. 33.47 in December 2022 from Rs. 15.05 in December 2021. Considering the robust financial performance backed by order inflows and government’s constant push towards infrastructure development, investors may add this company in their portfolio at this price and stay invested for long term period.
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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