Recommendations From Banking and Paints 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
KOTAK MAHINDRA BANK LTD
CMP - Rs. 1511.80
BSE CODE 500247
Volume 1,16,812
Face Value Rs. 5
Target Rs. 1640
Stoploss Rs. 1400(CLS)
Kotak Mahindra Bank headquartered in Mumbai, Maharashtra is a private sector bank. The bank’s business segments include treasury, investments, money markets, derivatives, primary dealership of Government securities and Balance Sheet Management unit (BMU), credit cards, vehicle financing, trade loans, broking, etc. On the financial front, the consolidated net interest earned by the bank in the first quarter of the FY20 came in at Rs. 8,314.19 crore as against Rs. 6,903.37 crore in the corresponding quarter of the previous fiscal, clocking a growth of 20.4 per cent. The total income in Q1FY20 was Rs. 12,129.56 crore, an increase by 22.48 per cent from Rs. 9,903.56 crore in Q1FY19. The profit after tax has increased by 22.72 per cent to reach Rs. 1,932.21 crore in Q1FY20 as against Rs. 1,574.48 crore in Q1FY19. For Q1FY20, the GNPA percentage to Gross Advances was 2.02 per cent as compared to 1.93 per cent in Q1FY19. We recommend a BUY.
KANSAI NEROLAC PAINTS LTD
CMP - Rs. 469.85
BSE CODE 500165
Volume 3847
Face Value Rs. 1
Target Rs. 515
Stoploss Rs. 440 (CLS)
Kansai Nerolac Paints Ltd. is a company engaged in the manufacture of paints. The company’s products include decorative paints, high performance coatings, automotive coatings, general industrial coatings and specialty coatings. It offers a range of products to auto makers, including pre-treatment chemicals, electrodeposition primers, intermediate coats/ primer surfacers, solid and metallic top coats, clear coats and touch-up paints. On the financial front, the net sales grew 9.42 per cent in Q1FY20 YoY to Rs. 1533.3 crore. The PBIDT rose 13.58 per cent to Rs. 253 crore in Q1FY20 as compared to Rs. 223.36 crore posted in the same period of the previous year. The PAT rose 4.41 per cent to Rs. 144.69 crore in Q1FY20 from Rs. 138.58 crore posted in Q1FY18. Of recent, Kansai Nerolac Paints has received approval for scheme of amalgamation of the company's wholly-owned subsidiaries, Marpol and Perma Construction Aids, with the company. The merger will provide benefits of synergy, economies of scale, growth and expansion to the company. We recommend a BUY.
(Closing price as of Aug 13, 2019)