|
Scheme Name |
Axis Quant Fund |
|
Scheme Benchmark |
S&P BSE 200 TRI |
|
Investment Objective |
To generate long-term capital appreciation by
investing primarily in equity and equity related instruments selected based
on a quantitative model. However, there can be no assurance that the
investment objective of the Scheme will be achieved. |
|
Fund Manager |
Deepak Agrawal and Hitesh Das (Foreign
securities) |
|
Asset Allocation |
Equity & Equity related instruments of
selected companies based on a quantitative model: 80% to 100%; Other Equity
and Equity related instruments: 0% to 20%; Debt & Money Market
Instruments: 0% to 20%; Units issued by REITs & InvITs: 0% to 10% |
|
Exit Load |
If redeemed/ switched-out within 12 months -For
10% of investment: Nil, For remaining investment: 1% |
|
Minimum Application Amount |
Rs 5,000 and in multiples of Rs 1/-thereafter |
India Pesticides Limited (IPL) was incorporated on December 13, 1984. IPL is an
R&D driven agro-chemical manufacturer of Technicals with a growing
Formulations business. IPL is the fastest growing agro-chemical companies in
India in terms of volume of Technicals manufactured. In Technicals company
manufacture Fungicide Technicals, Herbicides Technicals for the export
market and on Formulation side company manufacture insecticides, fungicide
and herbicides, growth regulators and Acaricides for domestic market. IPL has
also diversified itself in APIs manufacturing in recent times.
Positives: (a) Company has done capacity expansion of 62.5% in the last three
years, in which Technical capacity has almost doubled and formulation
capacity has increased by 8.3%. (b) Diversified portfolio of niche and quality
specialized agro chemical products. (c) Company having very high ROCE &
ROE of 45% & 34% in FY2021 along with very high EBITDA margins of 29.2%.
Investment concerns: (a) Indian agro-chemicals industry is fragmented in
nature and faces competition from different domestic and global
manufacturers for different products that we manufacture. (b) Top-10
customers contribute 57% of companies overall revenue, largest customer
represent 30% of revenue to maintain relations will be challenging for the
company. (c) Any change in categorization of key technical in thr red triangle
will affect the company performance.
Outlook & Valuation: Based on FY-2021 PE of 24.5x and EV/EBITDA of 18.2x at
upper band of the IPO price, which is slightly better than the peers companies.
Similarly company having one of the best ROE & ROCE of 34% and 45%
respectively. Company having a very healthy balance sheet with negative
Net Debt to Equity. We expect the upcoming expansion plan and higher
capacity utilisation will be the growth drivers for the company in future. We
are assigning a “Subscribe” recommendation to the issue.
Offer period Bid/Offer Opens On: Wednesday, 16th June,2021
Bid/Offer Closes On: Friday, 18th June, 2021
Issue Details Fresh Issue of Equity Shares aggregating up to Rs. 50 Cr.
Offer for sale of 10,985,444 Equity Shares
Issue Size(in Crore) Rs. 512.49 - 520.18 Cr.
Price Band Rs. 421 - 428
Bid Lot 35 shares and in multiple thereof
QIB 50% of the net offer (Rs. 258.80 - 260.09 Cr.)
NIB 15% of the net offer ( Rs. 76.87 - 78.03 Cr.)
Retail 35% of the net offer (Rs. 179.37 - 182.06 Cr.)
Registrar KFIN Technologies Pvt. Ltd.
Positives: (a) Consumer focused dairy company with a diverse range of products
under the “Dodla Dairy” and “Dodla” brands (b) Integrated business model with
well-defined procurement, processing and distribution capabilities (c) Focused
engagement and long term relationship with dairy farmers (d) Experienced
Board and senior management team.
Investment concerns: (a) DDL reported negative consolidated profit CAGR (over
FY2018-20), hence profit growth concerns remain; (b) Inability to procure
sufficient good quality raw milk at commercially viable prices may adversely
impact the operation as milk is a key raw material for all dairy products.
Outlook & Valuation: In terms of valuations, thepost-issue 9MFY21 annualised
PE works out to 16.4x (at the upper end of theissue price band), which is low
compared to Parag Milk Foods (trading at 32.7x). Further, DDL has shown
improvement in operating margin with efficient working capital cycle. Going
forward, we believe that DDL would perform better on the back of increase in
value added product mix. Thus, we recommend a subscribe rating on the issue
Krishna Institute of Medical Sciences Limited is one of the largest corporate healthcare groups in South India specially in AP and Telangana. It provides multi-disciplinary integrated healthcare services, with a focus on primary secondary, tertiary care and quaternary healthcare. Company operates 9 multi-specialty hospitals under the “KIMS Hospitals” brand, with an aggregate bed capacity of 3,064, including over 2,500 operational beds as of March 31, 2021. Positives: (a) Company having a good track record of retaining high quality doctors, consultants and medical support staff. (b) Company having negative Debt/Equity ratio, which is one of the lowest ratios among the peers. (c) Company having very high ROCE of 24% in FY2021 along with one of the highest EBITDA growth in the last 3 years. Investment concerns: (a) Business highly dependent on our healthcare professionals, including doctors that company engage on a consultancy basis, business and financial results could be impacted if it is unable to retain healthcare professionals. (b) Company dependence on their flagship hospital at Secunderabad in Telangana is at 33% any geopolitical changes can impact the company business. (c) Upcoming expansion plans in Bangalore & Chennai will require a lot of fresh capitals and both are very competitive markets. Outlook & Valuation: Based on FY-2021PE of 31.2x and EV/EBITDA of 17.8x at upper band of the IPO price and are slightly better than the peers’ companies. Similarly, company having one of the best ROE & ROCE of 23.8% and 24.8% respectively. Company having a very healthy balance sheet with negative Net Debt/ Equity. We expect the upcoming expansion plan in Bangalore & Chennai can be funded through internal accruals and minimum amount of debt. We are assigning a “SUBSCRIBE” recommendation to the issue.
Sona BLW Precision Forgings (Sona Comstar), a technology and innovation driven
company, derives ~40% of its revenues from high growth areas like Battery Electric
Vehicles (BEV) and Hybrid Vehicles. It is among the top 10 players globally for
differential bevel gears and for starter motors for the PV segment. It had 5% market
share for differential bevel gears, 3% for starter motors and 8.7% for BEV
differential assemblies. They have a diversified customer base across the globe with
75% of their income (sale of goods, FY21) coming from end-use in overseas markets.
Positives: (a) One of the leading manufacturers and suppliers to global EV markets
(b) One of the leading global companies and gaining market share, diversified
across key automotive geographies, products, vehicle segments and customers (c)
Strong research and development and technological capabilities in both hardware
and software development (d) Strong business development with customer centric
approach. (e) Consistent financial performance with industry leading metrics.
Investment concerns: (a) Business is dependent on the performance of the
automotive sector globally, including key markets such as US, Europe, India, and
China. (b) Negative publicity about the brand, or inability to protect any of the IPs,
including misappropriation, infringement could impact the business. (c) Business
largely depends upon the top ten customers and the loss of such customers or a
significant reduction in purchases by such customers will have a significantly
adverse impact on the business.
Outlook & Valuation: Sona Comstar is present in the right areas and can be a
major beneficiary of shift in focus of Global OEM’s towards EVs over the next
decade. As per industry reports, Sona Comstar is among handful of companies in
the world with strong motor and driveline capabilities. We believe that the company
can maintain strong growth rates from its current base given higher salience of
revenues from BEVs vs. industry. Ramp-up of business by select Global OEMs with
EV offerings provides evidence while increasing avg. realization per vehicle (ICE vs.
BEV) would drive top-line growth. The upper end of ` 291 implies FY21 P/E of
~75.2x which is in line with other Indian Auto Component companies that have
lower top-line growth, margins and return ratios vs. Sona Comstar. Hence, we
recommend “SUBSCRIBE” on the Issue.
SONA BLW PRECISION FORGING LIMITED
Offer period Bid/Offer Opens On: Monday, 14th June, 2021
Bid/Offer Closes On: Wednesday, 16th June, 2021
Issue Details Fresh Issue of Equity Shares aggregating up to Rs. 300 Cr.
Offer for sale of Equity Shares aggregating up to Rs. 5250 Cr.
Issue Size(in Crore) Rs. 5550 Cr.
Price Band Rs. 285 - 291
Bid Lot 51 shares and in multiple thereof
QIB 50% of the net offer ( Rs. 4,162.50 Cr.)
NIB 15% of the net offer (Rs. 833.50 Cr.)
Retail 10% of the net offer(Rs. 555 Cr.)
Shyam Metalics and Energy Limited (SMEL) is a leading integrated metal producing
company based in India with a focus on long steel products and is one of the
largest ferro alloys producer in terms of installed capacity. It has geographical
advantages, is present across the value chain and has ability to alter its product
mix. SMEL’s installed capacity stands at 5.71 MTPA and has captive power plants
with installed capacity of 227 MW which the company intends to expand to 11.6
MTPA and 357 MW, respectively over FY21E-25E.
Positives: (a) Integrated operations across the steel value chain (b) Strategically
located manufacturing plants supported by robust infrastructure resulting in cost
and time efficiencies (c) Diversified product mix with strong focus on value added
products, such as, ferro alloys, association with reputed customers and robust
distribution network (d) Strong financial performance and credit
Investment concerns: (a) Loss of any of suppliers or a failure by suppliers to deliver
some of primary raw materials may impact business adversely. (b) Business
depends on stable and reliable logistics and transportation infrastructure. (c) The
demand and pricing in the steel industry is volatile and are sensitive to the cyclical
nature of the industries it serves. (d) The COVID-19 pandemic and resulting
deterioration of general economic conditions has impacted the business and results
of operations.
Outlook & Valuation: The steel sector is experiencing tailwinds on account of rising
infrastructure spends by major economies. Domestically, prospects are looking up
which is driving the capacity addition frenzy with high likelihood of demand
outstripping supply. SMEL, with its operational efficiencies stands to benefit as it will
be nearly doubling its capacities which are slated to come onstream FY23E
onwards, if not earlier. At 9.2x TTM EV/EBITDA, valuations are optically high but
volume + realization growth and improving EBITDA/tonne (higher value added
contribution) are resulting in reasonable FY23E EV/EBITDA. Hence, we recommend
“SUBSCRIBE” on the Issue.
Offer period Bid/Offer Opens On: Monday, 14th June, 2021
Bid/Offer Closes On: Wednesday, 16th June, 2021
Issue Details Fresh Issue of Equity Shares aggregating up to Rs. 657 Cr.
Offer for sale of Equity Shares aggregating up to Rs.252 Cr.
Issue Size(in Crore) Rs. 909 Cr.
Price Band Rs. 303 - 306
Bid Lot 45 shares and in multiple thereof
Employee Reservation Up to 300,000 Equity Shares (Approx. Rs. 9 Cr.)
QIB 50% of the net offer (Rs. 450 Cr.)
NIB 15% of the net offer ( Rs. 135 Cr.)
Retail 35% of the net offer(Rs. 315 Cr.)
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