Sun Pharma: Maruti, Sun Pharma among MF favourites


The Prashant Jain-helmed HDFC Mutual Fund bought into Sun Pharma, ITC, Maruti and Coal India, but exited Bata and VIP Industries in November. The S Naren-led ICICI Prudential Mutual Fund cut positions in ITC, Infosys, Bharti Airtel and bought into Maruti and Mahindra & Mahindra.

Siemens
Market cap: Rs 54,700 crore

CMP: Rs 1,536

Bought by: Kotak MF

Capital goods major Siemens is one of the key players which will benefit from the economic recovery. Better-than-expected financial performance in the fourth quarter, encouraging commentary on margins and strong order book are a few factors that make analysts feel the company will be a beneficiary of an economic recovery. It had order inflows of Rs 3,220 crore in the fourth quarter. It has an order book of Rs 12,400 crore which gives visibility of revenues of close to one and a half years. Besides, the company has been able to show pronounced growth in its EBIT margins across its business verticals which include gas and power, infrastructure, mobility and digital industries. Given these factors, analysts have upgraded the company’s EPS for the next two years in the range of 14-16.6 per cent.

MF

J K Cement
Market cap: Rs 15,066 crore

CMP: Rs 1,950

Bought by: DSP MF

Among mid-sized cement companies, J K Cement is placed well to cater to the strong demand from the northern region given its strong presence. It has completed the expansion of 4.2MT which will make its presence stronger in the north and help cater to central and western markets. At present, the company is operating at 70 per cent capacity. With the timely expansion, the company is expected to gain market share in the aforementioned regions. Cement prices in the northern region have been higher than the last year. The company the second-largest white cement producer in India (0.6 MTPA), is expected to benefit since demand in white cement has recovered well in the past few quarters. In the next two fiscals, analysts estimate 17-22 per cent growth in its earnings per share (EPS), thereby making it one of the attractive bets among mid-sized cement companies.

Crompton Greaves

Market cap: Rs 20,756 crore

CMP: Rs 330

Bought by: Nippon India MF

Superior cost control, better than-expected improvement in margins thanks to gain in market share, network expansion in rural areas and strong brand equity among consumers have helped boost revenue of the company in the September 2020 quarter. According to analysts, there has been a pronounced improvement in demand for lighting and agri-pump products which will drive future revenues for the company. The company has benefited from strong growth in e-commerce buying and demand for consumer products in rural areas. Analysts believe that there is enough scope for the company’s inventory levels to rise further from the present level. They have raised the company’s EPS estimates in the range of 17-25 per cent for the next two fiscals

State Bank of India
Market cap: Rs 2,43,151 crore

CMP: Rs 272

Bought by: Nippon India MF

Fund managers believe SBI is well-positioned to report strong earnings growth as the impact of Covid 19 moderates and the economy picks up. They believe NPL formation has moderated significantly while the strong pipeline of accounts under recovery will help further improvement. While most other PSBs have lost market share in the retail space, the bank has improved its share in both loans as well as deposits. Analysts believe its superior franchise will see it gain incremental market share in the current environment. An added advantage is that its subsidiaries — SBI MF, SBI Life Insurance, SBI General Insurance and SBI Cards — have displayed robust performances and gained scale and market share in their respective segments





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