Recommendations From Computers - Software & Food Processing 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.

BIRLASOFT LIMITED 

CMP - Rs 164.20 

BSE CODE : 532400
Volume : 1,09,133
Face Value : Rs 2
Target : Rs 182
Stoploss : Rs 152 (CLS)

Birlasoft provides software development and IT consulting services. Its services include data analytics, connected products, intelligent automation, customer relationship management, manufacturing execution systems, etc. On the quarterly consolidated front, the company reported net sales of Rs 914.63 crore for Q1FY21, increasing by 17.68 per cent from Rs 777.19 crore in Q1FY20. The operating profit for Q1FY21 expanded by 22.42 per cent to Rs 104.82 crore from Rs 85.63 crore posted in Q1FY20. It gained net profit of Rs 56.35 crore in Q1FY21, which is an increase by 34.79 per cent when compared to the net profit of Rs 41.80 crore gained in Q1FY20. Not only has the company seen improvement in its margins but going forward Birlasoft is also expected to benefit from geographical expansion, client mining, larger and improved deals, better profitability, etc., which will drive its revenue growth. 

Hence, we recommend a BUY.

HATSUN AGRO PRODUCT LIMITED 

CMP - Rs 786.20 

BSE CODE : 531531
Volume : 3,863
Face Value : Rs 1
Target : Rs 850
Stoploss : Rs 730 (CLS)

Hatsun Agro Product is engaged in the business of manufacturing and selling of milk, milk products and ice-creams. Its popular brands include Arokya, Hatsun, Arun Ice Creams, Ibaco, Oyalo, Santosa Cattle Feed and Aniva Sweets. Looking at the quarterly trends on a standalone basis, the net sales of the company for Q1FY21 decreased by 10.11 per cent to Rs 1,279.28 crore from Rs 1,423.22 crore reported for Q1FY20. The PBDT expanded by 11.23 per cent to Rs 162.92 crore for Q1FY21 as compared to Rs 146.47 crore for Q1FY20. The company gained net profit of Rs 56.11 crore in Q1FY21, which is an increase by 9.6 per cent as compared to the net profit of Rs 51.19 crore gained in Q1FY20. It has a strong portfolio with well-established brands enjoying widespread presence, particularly in South India. Diversification in revenue profile and healthy operating profitability will enable the company to witness more positive growth. Hence, we recommend a BUY. 

(Closing price as of Sept 09, 2020)