You can take a look at these stocks which are good for Diwali
ICICI Prudential Life Insurance
ICICI Prudential Life Insurance (ICICI Pru) is the largest private sector life insurer in India. ICICI Pru is a joint venture between ICICI Bank and Prudential Corporation Holdings. We estimate ICICI Pru to deliver ~26% CAGR in value of new business (VNB) over FY17-19E supported by 14% CAGR in NBP (new business premium) and 390 bps increase in VNB margins. Embedded Value (EV) will likely grow at ~11% CAGR over FY17-19E. Return on Embedded Value (ROEV) should remain robust at 14-16.5% over the medium term. The company has strong financials and a healthy balance sheet. Its persistency ratio and solvency ratio are higher than peers. We expect an upside of 20% from CMP of Rs 403 over a period of 1 year.
Financials
Rs cr
Net Premium Income
VNB Margins (%)
EPS (Rs)
EPS growth %
P/EV (x)
RoE (%)
RoEV (%)
FY18E
26,400
12.0
11.7
0.0
2.3
24.3
14.0
FY19E
31,200
13.0
13.5
15.4
2.0
24.1
14.8
Source: 5paisa Research
Century Plyboard
Century Plyboard (CPBI) is India’s leading plywood manufacturing company with 25% market share in the organized market. It is also the 3rd largest manufacturer of laminates with 12% market share after Greenply and Merino. We expect revenue CAGR of 15% over FY17-FY19E on account of capacity expansion in laminates and foray into MDF segment. CPBI MDF is likely to commence operations from Q2FY18E and is expected to contribute incremental revenue of ~Rs 320 cr in FY19E. Further, Government’s focus on building smart cities, affordable housing under PMAY is a positive trigger. We expect EBITDA CAGR 23% of over FY17-FY19E on account of entry in the high margin MDF segment and capacity expansion. GST will be a game changer for the organized sector/company. We expect PAT CAGR of 24% over FY17-FY19E. We expect an upside of 25% from CMP of Rs 264 over next 12 months.
Financials
Rs cr
Revenue
EBITDA margin %
EPS (Rs)
P/E (x)
ROE (%)
ROCE (%)
FY18E
2,256
17.6
10.5
24.1
25.6
23.3
FY19E
2,595
18.4
13.0
19.4
24.9
25.0
Source: 5paisa Research
Interglobe Aviation
Interglobe Aviation (Indigo) is a low-cost carrier with the largest domestic market share of ~38% as of Aug’17. Its fleet of135 aircrafts is the largest in India with outstanding orders to purchase 400 new aircrafts by 2025. Its 87% revenue comes from passenger segment (91% domestic & 9% international) and rest from ancillary and cargo segment as of FY17. InterGlobe is transforming strategically which includes shifting from pure sale and leaseback models to buying aircrafts, increasing focus on regional routes (inducting ATRs Vs single aircraft type) and targeting shorter term leases while the Neo engine issues are resolved. These are expected to aid market share gains for Indigo. The company has sufficient cash on the books of ~RS 8,000 Cr (post QIP @ Rs 1,130 per share) which should enable it to fund its fleet acquisitions. The bottom-line of the company has grown at 56% CAGR in the past 3 years. We expect an upside of 22% from CMP of Rs 1105 over next 12 months.
Financials
Rs Cr.
Revenue
Growth YoY
EBITDA Margin
EPS (`)
P/E (x)
P/ ABV (x)
ROE
FY18E
22,947
23.5
13.9
59.1
18.6
8.1
50.6
FY19E
28,490
24.2
14.0
76.7
14.4
7.0
52.4
Source: 5paisa Research
Ujjivan Financial Services
Ujjivan Financial Services (UFSL) is the third largest NBFC-MFI focused on serving the underpenetrated economically active poor segment. Its FY17 gross loan book stands at Rs 6,379 cr. The company is adequately capitalized for the next two years. We expect the overall loan growth of ~18% in FY18E and a CAGR of ~26% over FY17-19E. Incrementally, the focus will be on secured segments like housing and MSME, which are expected to grow from 3% of the loan book currently to one-third of the loan book by FY20E. UFSL has got the scheduled bank status approval which will allow it to raise deposits from big institutions like MF, insurance companies. Thus, we expect improvement in net interest margin by 140 bps over FY17-19E as cost of funds to go down by 230 bps over the similar period. We expect an upside of 20% from CMP of Rs 332 over next 12 months.
Financials
Rs cr
Net interest income
Pre-provision profit
EPS (Rs)
P/BV (x)
RoA (%)
RoE (%)
FY18E
7,471
2,818
1.5
2.5
0.2
1.0
FY19E
9,520
3,954
16.4
2.3
1.7
10.7
Source: 5paisa research
L&T Infotech
L&T Technology Services, a subsidiary of L&T, focuses purely on engineering research & development (ER&D). We expect 13% revenue USD CAGR on account of pickup in BFS spending as the regulatory norms soften. Additionally, LTI is also banking on its digital offerings in insurance which is gaining traction amongst clients and is expected to grow at ~9% USD CAGR (FY17-19E). BFSI contributes ~34% to total revenues. North America is still the key market (69% of revenues); the company is making investments in UK, Germany, and Switzerland to diversify its geographical risk. It has strong clientele base. The top 20 clients (68% of its revenues in FY17) have driven ~11% revenue USD CAGR over the past three years. We expect an upside of 22% from CMP of Rs 804 over next 12 months.
Financials
Rs Cr.
Revenue
EBITDA margin
EPS(`)
EPS Growth (%)
P/E (x)
ROE
ROCE
FY18E
6,956
17.9%
60.4
6.4
13.2
27.4%
28.3%
FY19E
7,582
17.8%
66.5
10.0
12.0
27.8%
28.6%
Source: 5paisa Research