Recommendations from Computers - Software & Pharma Sectors
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.
TATA ELXSI
CMP - Rs 1,348.25
BSE CODE 500408
Volume 71,962
Face Value Rs 10
Target Rs 1,450
Stoploss Rs 1,260 (CLS)
Tata Elxsi Limited is engaged in the designing and development of computer hardware and software. The company operates in two major segments: system integration and support and software development and services. Looking at the quarterly trends on a standalone basis, net sales for Q1FY21 increased by 10.72 per cent to Rs 400.49 crore from Rs 361.71 crore reported in Q1FY20. PBDT expanded by 29.93 per cent to Rs 104.77 crore in Q1FY21 as compared to Rs 80.64 crore posted in Q1FY20. The company gained net profit of Rs 68.87 crore in Q1FY21, clocking a growth of 41.15 per cent compared to net profit of Rs 48.79 crore gained in Q1FY20. The company is expected to continue to benefit from its diversification and de-risking initiatives. Additionally, the technology sector has a positive growth outlook and Tata Elxsi’s products and services are well-placed to witness strong growth. Hence, we recommend BUY.
ALEMBIC PHARMACEUTICALS
CMP - Rs 972.20
BSE CODE 533573
Volume 11,058
Face Value Rs 2
Target Rs 1050
Stoploss Rs 900(CLS)
Alembic Pharmaceuticals Limited is engaged developing formulations and active pharmaceutical ingredients (API) focusing on anti-infective, analgesic, cough and cold therapies, etc. On a consolidated basis, for Q1FY21 the company reported net sales of Rs 1,341.32 crore increasing by 41.35 per cent from Rs 948.91 crore reported for Q1FY20. PBDT for Q1FY21 doubled to Rs 401.01 crore compared to Rs 190.43 crore reported for Q1FY20. It gained net profit of Rs 292.74 crore in Q1FY21, rising significantly by 145.86 per cent compared to Rs 119.07 crore gained in Q1FY20. The company witnessed strong growth in API and ex-US generic formulations sales. It also has various upcoming product launches and going forward, is expected to have a very high growth trajectory in the US led by commercialization of injectable manufacturing facilities. Hence, BUY.
(Closing price as of Oct. 05, 2020)