Recommendations from Pharmaceuticals & Electric Equipments

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.

AJANTA PHARMA LTD.

CMP - Rs 1,686.45
BSE CODE: 532331
Volume : 6,262
Face Value : Rs 2
Target : Rs 1,810
Stoploss : Rs 1,600 (CLS)

Ajanta Pharma Ltd. is a specialty pharmaceutical company engaged in developing, producing and marketing a range of branded and generic formulations. Its business includes branded generics in the emerging markets of Asia and Africa, generics in the developed markets of the US and institutional sales. Looking at the quarterly trends on a consolidated basis, for Q2FY21 the company reported net sales of Rs 715.91 crore, which is an increase by 11.38 per cent as compared to the net sales of Rs 642.76 crore for Q2FY20. PBDT rose by 50.15 per cent to Rs 277.57 crore for Q2FY21 from Rs 184.86 crore for Q2FY20. The net profit increased by 46.29 per cent to Rs 170.22 crore in Q2FY21 from Rs 116.36 crore reported for Q2FY20. Based on the pharmaceutical sector’s positive growth, we recommend BUY.

HAVELLS INDIA LTD. 

CMP - Rs 864.60
BSE CODE : 517354
Volume : 1,46,847
Face Value : Rs 1
Target : Rs 930
Stoploss : Rs 810 (CLS)

Havells India Ltd. is a fast moving electrical goods (FMEG) company which has a strong presence globally. It is a major power distribution equipment manufacturer. Products served by Havells India include industrial and domestic circuit protection devices, cables and wires, motors, fans, modular switches, etc. On a quarterly consolidated basis, the net sales were Rs 2,459.49 crore in Q2FY21 as compared to Rs 2,232.65 crore in Q2FY20, a rise of 10.16 per cent. The operating profit came in at Rs 501.44 crore in Q2FY21 , majorly up by 90.42 per cent than Rs 263.34 in Q2FY20. The net profit saw a rise of 81.89 per cent as compared to the same quarter the previous year. Growth in infrastructure in residential, commercial and industrial areas has given a boost to the electrical equipment sector in the wake of the easing of pandemic-driven lockdowns. Well-known players like Havells India are on the verge of growth due to rising demand and advanced technologies. Considering these factors and strong growth in financials, we recommend BUY. 

(Closing price as of Dec 15, 2020)