Recommendations From Engines & Computers - Software 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.
CUMMINS INDIA LTD.
CMP - Rs 944.75
BSE CODE : 500480
Volume : 1,66,312
Face Value : Rs 2
Target : Rs 1,020
Stoploss : Rs 880 (CLS)
Cummins India designs, manufactures, distributes and services diesel and alternative fuel engines from 2.8 to 95 litres, diesel and alternative fuel power generator sets of up to 3,000 kW as well as related components and technology. On the consolidated quarterly front, the company’s net sales and operating income gained by 18.24 per cent from Rs 1,062.46 crore in Q4FY20 to Rs 1,256.25 crore in Q4FY21. Operating profit exhibited strong growth of 69.5 per cent from Rs 134.48 crore in Q4FY20 to Rs 227.94 crore in Q4FY21. It reported net profit at Rs 133.77 crore in Q4FY21 in comparison to net profit of Rs 141.25 crore reported in Q4FY20, dipping by 5.3 per cent. The company believes that with improved operating fundamentals, great products, a strong balance-sheet and steady cash flow, it is strongly placed to succeed in the current dynamic conditions. Hence, expecting quarterly improvement by the company as it is well-prepared to scale up when the economy regains momentum, we recommend BUY.
ORACLE FINANCIAL SERVICES SOFTWARE LTD
CMP - Rs 4,513.70
BSE CODE : 532466
Volume : 5,890
Face Value : Rs 5
Target : Rs 4,850
Stoploss : Rs 4,200 (CLS)
Oracle Financial Services Software Ltd. is a subsidiary of Oracle Corporation. It is a retail banking, corporate banking and insurance technology solutions provider for the banking industry. In terms of consolidated quarterly results, net sales and operating income rose by 4.5 per cent from Rs 1,337.26 crore in Q1FY21 to Rs 1,397.37 crore in Q1FY22. Operating profit gained 3.36 per cent from Rs 737.84 crore in Q1FY21 to Rs 762.65 crore in Q1FY22. The company reported net profit at Rs 524.19 crore in Q1FY22 as compared to net profit of Rs 479.79 crore reported in Q1FY21, reporting a growth of 9.25 per cent. The company’s multibillion dollar Fusion and NetSuite cloud applications’ businesses saw dramatic increases in their already rapid revenue growth rates. The accelerating growth rates of both applications and infrastructure cloud businesses during the year drove earnings per share growth up to 21 per cent in FY21. Hence, with positive bias regarding the growth of the company in the coming quarters, we recommend BUY.
(Closing price as of Aug 10, 2021)