Recommendation from Pharmaceuticals & Insurance 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.
SOLARA ACTIVE PHARMA SCIENCE

CMP - Rs.549.95 
BSE CODE 541540
Volume  8,513
Face Value Rs.10
Target Rs.615
Stoploss Rs.490 (CLS)

Solara Active Pharma Sciences Limited is a pharmaceutical company focused on the manufacturing of pharmaceutical preparation products. It offers a range of products such as anaesthetic, analgesics, anti-viral, retinoid, anti-emetic and anti-malarials, among others. On a quarterly consolidated basis, the company reported net sales of Rs. 343.68 crore in Q3FY20 from Rs. 356.23 crore in Q3FY19, representing a fall of 3.52 per cent. Operating profit, on the other hand, grew by a steady 27.17 per cent to Rs. 83.74 crore in Q3FY20 from Rs. 65.85 crore in Q3FY19. The company reported impressive growth of 87.01 per cent in net profit from Rs. 22.10 crore in Q3FY19 to Rs. 41.33 crore in Q3FY20. Earnings in the pharmaceutical sector are relatively secure in a market rife with fears of a slowdown due to various government restrictions as demand for medicines and healthcare items have remained strong. Thus, we recommend a BUY on Solara Active Pharma Science.

SBI LIFE INSURANCE COMPANY 

CMP - Rs.743.20
BSE CODE 540719
Volume 58,064
Face Value Rs.10
Target Rs. 840
Stoploss Rs. 660 (CLS)

SBI Life Insurance Company Limited is an insurance company which offers individual and group insurance plans, including traditional and unit-linked plans. Its products cover life, health, annuity, pension and variable insurance. On a standalone quarterly front, its net sales grew by 27.93 per cent to Rs. 11,694.51 crore in Q3FY20 from Rs. 9,141.26 crore in the corresponding period for the previous fiscal year. The company reported an operating profit of Rs. 469.07 crore in Q3FY20 from Rs. 316.78 crore in Q3FY19, representing a growth of 48.07 per cent. For the quarter ended December 2019, net profit was recorded at Rs. 389.76 crore, increasing by 47.48 per cent from Rs. 264.28 crore in the quarter ended December 2018. The company has consistently posted strong growth in new business premiums, driven by its group and individual accounts along with robust multichannel distribution platforms enabling wider presence in the market. Thus, we recommend a BUY.

(Closing price as of Apr 08, 2020)