Niraj Nisar, Partner, Wealth Builders Broking and Distribution Services LLP
1. LIBAS CONSUMER PRODUCTS LTD – BUY CALL
CMP INR: 72
Target Price INR: 120
Target Period – 3 to 6 Months
Overview: Brainchild of Reshma & Riyaz Gangji, Libas specializes in ethnic wear for Men and women, wedding wears, corporate uniforms, persified into FMCG Segment by importing rock salt, and has recently launched an Innerwear brand name KNG.
- NSE listed Libas Consumer Products Ltd., has launched Inner ware segment Brand – KNG. Libas Consumer Products has announced major persification cum expansion plans whereby it is persifying into Men’s innerwear, Women intimate wear (organic fabrics)
- Night wear, Casual wear, Lounge wear – which will move the company forward and looks to be placed as peer competitor to leading Brands such as Jockey and Lux etc.
- The Company has online portal stores on Amazon, Flipkart etc. and now inner wear of which 70% sale is expected online and will boost company turnover in a short time.
- The company is expecting to generate revenues of Rs.300 crore in the next 3 years.
- Meanwhile the Company has announced excellent Q1FY22 results (Unaudited) with Total Revenue jumping from Rs. 3.19 Cr (Q1FY21) to Rs. 12.08 Cr (Q1FY22) and PAT turns positive from a loss of Rs. 5.65 Cr (Q1FY21) to profit of Rs. 1.74 Cr (Q1FY22).
- Libas has always been investor-friendly and earlier this year, the company has also rewarded investors 2 bonus issue, i.e. 2 bonuses in a 3-year period.
2. KARDA CONSTRUCTIONS LIMITED – BUY CALL
CMP INR: 185
Target Price INR: 240
Target Period – 3 to 6 Months
Overview: Karda Constructions Limited is one of largest builders and developers in Nashik since 1994. The Core business activity of this company is the real estate development – Residential Projects and Office Space and Construction Contracts with presence across all segments -Low, Medium and Premium segments. As per investor presentation Feb 2021, it has already delivered over 32.54 lakhs Sq. feet. 1.57 and completed 30 projects till now.
- Market Leadership position: Company has a strong presence in Nasik region and its projects cover almost 70% of the area and enjoying market leadership position. So, it is well positioned to capitalize growth opportunities in that region
- Well Established Brand: on account of solid promoter reputation, better execution skill, attracting the best joint development landlords. Company has cemented its credential as a good brand in the Nashik region.
- Robust Joint Development and Asset Light Model: Company is having JD/partnership with leading real estate companies and having maintained asset light model for working.
3. CAN FIN HOMES LTD – BUY CALL
CMP INR: 532
Target Price INR: 660
Target Period – 3 to 6 Months
Overview: Can Fin Homes Limited (CFHL) is a key player engaged in the business of housing finance in India and one of the few Institutions permitted by the Regulator National Housing Bank (NHB to accept deposits. The Company offers a range of products on housing such as loans for home purchase home construction home improvement / extension site purchase as well as non-housing finance. It has a pan-India presence with 154 branches 21 Affordable Housing Loan Centres & 14 Satellite Offices spread across 21 states and union territories.
- Can Fin Homes’ (CFH) Q1FY22 results were operationally in line. While AUM grew 7% YoY/1% QoQ, disbursements declined 55% sequentially on account of lockdowns led by Covid-19’s second wave.
- Reported NIMs compressed 38bps QoQ (in line with management’s strategy of chasing growth at the expense of margins). Lower NIMs and higher opex YoY resulted in a decline of 5%/10% in net revenue/PPOP, respectively.
- *Credit costs continued to moderate with provisions declining 85% YoY/15% QoQ, resulting in PAT growth of 16% YoY/6% QoQ. Management expects growth to return from Q2FY22 while NIMs/ spreads should increase with loans getting repriced at higher yields. Asset quality should remain stable with restructuring 2.0 expected at <2%.
- With asset quality holding steady and growth returning, we continue our ’BUY’ recommendation on the stock with any third wave induced lockdown being a major risk to our hypothesis
About the Author
Wealth Builders Broking and Distribution Services LLP is an investment consultancy firm offering a range of financial products and services. Founded in 2017 by Mr. Niraj Nisar, the firm is one of the oldest and well reputed organisations in its category.
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