Recommendations From Auto Ancillaries & Infrastructure Sectors

Recommendations From Auto Ancillaries & Infrastructure 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.
GABRIEL INDIA LTD.

CMP - Rs 138.10
BSE CODE : 505714
Volume : 2,42,792
Face Value : Rs 1
Target : Rs 152
Stoploss : Rs 127 (CLS)


Gabriel India Ltd. (GIL), a flagship company of Anand Group, is a market leader in the commercial vehicles segment and enjoys enduring ties with Indian Railways. In the standalone quarterly results declared by the company, the net sales and operating income took a leap by 36.76 per cent from Rs 424.64 crore in Q4FY20 to Rs 580.73 crore in Q4FY21. The operating profit rose by 53.23 per cent from Rs 36.25 crore in Q4FY20 to Rs 55.54 crore in Q4FY21. The company reported net profit at Rs 28.85 crore in Q4FY21 in comparison of net profit of Rs 26.59 crore reported in Q4FY20, reporting subtle gain of 8.52 per cent. The company has recently tilted its product mix towards the twowheeler segment where GIL continues to gain market share. The commercial vehicle volumes are also showing improvement from October 2020 whereas the exports have increased from 2 per cent in Q4FY20 to 5 per cent in Q4FY21 owing to new orders. Hence, we recommend BUY.

H.G. INFRA ENGINEERING LTD. 

CMP - Rs 527.65
BSE CODE : 541019
Volume : 43,998
Face Value : Rs 10
Target : Rs 595
Stoploss : Rs 475 (CLS)


Founded in 2003, H G Infra Engineering Ltd. is an Indian infrastructure company having presence over seven states and centres in the engineering and construction of expressways, highways, railways and water pipelines. In the consolidated quarterly results announced by the company, the net sales and operating income zoomed by 66.57 per cent from Rs 634.12 crore in Q4FY20 to Rs 1,056.29 crore in Q4FY21. The operating profit exhibited robust growth of 80.55 per cent from Rs 110.76 crore in Q4FY20 to Rs 199.98 crore in Q4FY21. The company reported net profit at Rs 111.11 crore in Q4FY21 in comparison of net profit of Rs 54.32 crore reported in Q4FY20, growing attractively. Recently, the company has received a letter of acceptance (LoA) from National Highways Authority of India (NHAI) for a 15.7 km road project in Delhi. The project is in regard to the development of a six-lane urban extension road in Delhi on an EPC mode. Hence, owing to the company’s healthy execution and strong growth outlook, we recommend BUY.

(Closing price as of July 27, 2021)

 

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