 "These seven smallcap stocks rally over 50% in one month; Venkys zooms 80%")
Venky’s (India), HEG, Graphite India, Bhansali Engineering Polymers, Jaiprakash Associates, B L Kashyap and Sons and Rai Saheb Rekhchand Mohota Spinning & Weaving Mills are among seven stocks from the S&P BSE Smallcap index, which rallied by over 50% in the past one month.
The S&P BSE Smallcap index was up 1.9% as compared to a marginal 0.2% decline in the S&P BSE Sensex.
Venky’s (India) hit new high of Rs 2,248, up 8%, extending its four-session long rally of 47%. The stock of poultry firm has zoomed 80% in past one month from Rs 1,245 on June 5, 2017.
Analyst at Kotak Securities, project 42% compound annual growth rate (CAGR) in earnings through FY17-FY19 for Venky’s (India) and expect significantly improved return ratios and reduction in debt, going forward, which builds a case for greater investor attention/ re-rating.
“Since FY15/16, measures taken by the industry to correct the supply-demand mismatch in poultry have begun to impact chicken prices positively. In addition, the company also stands to gain from external factors - such as restrictions on cow slaughter and decline in raw material prices (soya prices down 30% y/y as of May, corn prices down 10%),” the broking firm said in recent report.
Near-term (FY18) earnings visibility is high, especially following sharp rise in poultry prices already witnessed in 1QFY18, added report.
Graphite India and HEG, engaged in graphite electrode business, have rallied 66% and 54%, respectively, in past one month.
India Ratings & Research (Ind-Ra) affirmed the credit rating of HEG as IND A' with stable outlook.
“With the tightness on the supply side, given the change in the industry structure and demand remaining healthy, the demand supply balance has shifted in the favour of the suppliers. This has resulted in a significant increase in graphite electrode prices to nearly USD 4,000/t from USD 2,000/t in the spot market,” Ind-Ra said in a press release.
However, most players have not been able to take the full benefit of the price increase, given that the graphite electrode industry contracts for 60%70% of the capacity at the beginning of a calendar year. The benefit of the increased prices will largely be realised in 2HFY18, given that capacities in these quarters would have been contracted at higher prices, it added.
Meanwhile, another 20 stocks from the S&P BSE Smallcap index were up between 25% and 49% in past one month.
The S&P BSE Smallcap index was up 1.9% as compared to a marginal 0.2% decline in the S&P BSE Sensex.
Venky’s (India) hit new high of Rs 2,248, up 8%, extending its four-session long rally of 47%. The stock of poultry firm has zoomed 80% in past one month from Rs 1,245 on June 5, 2017.
Analyst at Kotak Securities, project 42% compound annual growth rate (CAGR) in earnings through FY17-FY19 for Venky’s (India) and expect significantly improved return ratios and reduction in debt, going forward, which builds a case for greater investor attention/ re-rating.
“Since FY15/16, measures taken by the industry to correct the supply-demand mismatch in poultry have begun to impact chicken prices positively. In addition, the company also stands to gain from external factors - such as restrictions on cow slaughter and decline in raw material prices (soya prices down 30% y/y as of May, corn prices down 10%),” the broking firm said in recent report.
Near-term (FY18) earnings visibility is high, especially following sharp rise in poultry prices already witnessed in 1QFY18, added report.
Graphite India and HEG, engaged in graphite electrode business, have rallied 66% and 54%, respectively, in past one month.
India Ratings & Research (Ind-Ra) affirmed the credit rating of HEG as IND A' with stable outlook.
“With the tightness on the supply side, given the change in the industry structure and demand remaining healthy, the demand supply balance has shifted in the favour of the suppliers. This has resulted in a significant increase in graphite electrode prices to nearly USD 4,000/t from USD 2,000/t in the spot market,” Ind-Ra said in a press release.
However, most players have not been able to take the full benefit of the price increase, given that the graphite electrode industry contracts for 60%70% of the capacity at the beginning of a calendar year. The benefit of the increased prices will largely be realised in 2HFY18, given that capacities in these quarters would have been contracted at higher prices, it added.
Meanwhile, another 20 stocks from the S&P BSE Smallcap index were up between 25% and 49% in past one month.
| Company | 05/06/2017 | LTP | % chg |
| Venky's (India) | 1244.65 | 2222.35 | 78.6 |
| Bhansali Engg. | 41.00 | 70.30 | 71.5 |
| Graphite India | 113.70 | 188.75 | 66.0 |
| JP Associates | 12.75 | 20.95 | 64.3 |
| B.L.Kashyap | 30.80 | 48.80 | 58.4 |
| HEG | 277.15 | 427.45 | 54.2 |
| Rai S R Mohota | 86.95 | 132.50 | 52.4 |
| Jaypee Infratec. | 12.46 | 18.55 | 48.9 |
| Phillips Carbon | 447.95 | 645.00 | 44.0 |
| Tinplate Co. | 89.60 | 126.60 | 41.3 |
| McNally Bharat | 41.00 | 57.10 | 39.3 |
| Shivam Autotech | 51.05 | 70.20 | 37.5 |
| Shilpi Cable | 30.00 | 41.25 | 37.5 |
| Take Solutions | 129.30 | 175.85 | 36.0 |
| MEP Infrast. | 92.30 | 125.50 | 36.0 |
| Man Inds. | 57.15 | 77.05 | 34.8 |
| GVK Power Infra. | 6.28 | 8.39 | 33.6 |
| Sona Koyo Steer. | 83.30 | 108.00 | 29.7 |
| Lux Industries | 838.35 | 1084.00 | 29.3 |
| NELCO | 79.70 | 103.00 | 29.2 |
| BASF India | 1353.75 | 1747.85 | 29.1 |
| Meghmani Organ. | 41.10 | 52.15 | 26.9 |
| Hil Ltd | 811.05 | 1025.00 | 26.4 |
| Pioneer Distil. | 164.25 | 207.50 | 26.3 |
| Magma Fincorp | 131.05 | 165.00 | 25.9 |
| BEML Ltd | 1238.60 | 1554.15 | 25.5 |
| SEAMEC Ltd | 125.50 | 156.90 | 25.0 |
| S&P BSE Smallcap index | 15410.0 | 15702.0 | 1.9 |
| S&P BSE Sensex | 31309.5 | 31243.7 | -0.2 |
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