Recommendations From IT Software Products And Heavy Electrical Equipment Sector
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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.
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NUCLEUS SOFTWARE EXPORTS
CMP - Rs300
BSE CODE 531209 Volume 1593 Face Value Rs10
Nucleus Software is a lending and transaction banking products provider to global banks & NBFCs. The company's robust product portfolio includes FinnOne Neo to provide affordable, quickly deployable, scalable and customised software, and FinnAxia to provide integrated global transaction banking solutions. It has tied up with TAB Capital to provide FinnOne access strengthening TAB’s presence in digital lending market. The company has recently won order from Atlas Finance, for Lendtech, a lending analytics provider. The company has launched 4.0 version of FinnAxia in FY17 to provide extended compliance to global and regional regulations. Financially, it reported 6.8% revenue growth and 93% PAT growth in FY17. We recommend Buy in the scrip for a target of Rs345 and with a stop loss of Rs290.
KALPATARU POWER TRANSMISSION
CMP - Rs352
BSE CODE 522287
Volume 10608
Face Value Rs2
Kalpataru is a transmission engineering, procurement and construction (EPC) company. The company holds 67% stake in JMC Projects through which it carries construction activities. During Q1FY18, the company’s revenue de-growth in transmission business was duly offset by 17% and 27% YoY growth in railway and piping businesses, respectively. Annually, the company has reported 13.8% and 39.8% revenue and PAT growth, respectively. The company holds robust order book at Rs975 crore as of June 2017, of which 43% comprise international orders, providing revenue visibility for over two years, while JMC too holds order book of Rs7000 crore till Q1FY18. Going forward, the company is also likely to benefit from high transmission capex by domestic and global markets. Power Grid SEB’s would invest Rs45,000 crore for improvement of intra-state transmission network. Thereby, considering strong order book of self and subsidiaries and the government spending, we recommend Buy in the scrip for a target of Rs418 and with a stop loss of Rs340.
