Recommendations From Consumer Electronics & Life Insurance 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.

BLUE STAR 

CMP - Rs730.25
BSE CODE 500067
Volume 1731
Face Value Rs2
Target Rs795
Stoploss Rs690(CLS) 

Blue Star offers a wide range of cooling solutions for all types of customers. The products offered by the company include central and packaged air-conditioning systems, i.e. they provide a range of chillers, air handling units and fan coil units etc. On the consolidated financial front, the company posted net sales of at Rs1575.45 crore in Q1FY20, 4.48 per cent higher as against Rs1507.83 crore. The PBIDT however fell by 15.96 per cent YoY to Rs114.85 crore. The finance cost for the quarter decreased to Rs8.23 crore from Rs12.10 crore in Q1FY19 due to effective management of working capital and the consequent lower borrowings in Q1FY20. During the quarter, the company won the largest tunnel ventilation system (TVS) and environmental control system (ECS) contract from Mumbai Metro Rail Corporation (MMRCL), valued at Rs253 crore. The order inflows from factory and office spaces segments also grew at a steady pace during the period. We recommend a BUY.

ICICI PRUDENTIAL 

CMP - Rs417.20
BSE CODE 540133
Volume 259636
Face Value Rs10
Target Rs445
Stoploss Rs390 (CLS) 

ICICI Prudential Life Insurance (IPRU) is among the market leaders in the private sector life insurance space, aided by its strong brand, distribution capabilities and product portfolio. In Q1FY20, the net sales for the company grew by an impressive 14.17 per cent YoY. The consolidated net profits was up by 1.20 per cent at Rs284.64 crore. The operating profits improved from -41.56 per cent to -33.06 per cent in June 2019 when compared to June 2018 quarter, showing improvement of 8.50 per cent. The operating profits (PBDIT) excluding other income grew by 9.18 per cent on YoY basis. The re-engineered business model of ICICI Prudential Life Insurance focuses on a more diversified product mix and an increasing protection mix. The sharp increase in VNB margin is encouraging. VNB margin expanded as much as ~350 bps YoY to 21 per cent due to product mix change without any expense deterioration. The growth prospects of the company and healthy product mix prompts us to recommend a BUY in this counter