The Baseline    
20 Nov 2021
Five Interesting Stocks Today
  1. Tanla Platforms: This communication platform as a service (CPaaS) provider’s stock recently touched a 10-year high. The company is reporting consistent profit growth for the last six quarters and its Q2FY22 net profits rose 67% YoY to Rs 136.2 crore. The good performance is because of high-paying existing clients and additional market share from acquiring Trubloq. Going forward, the company plans to invest in AI, machine learning, and crypto technologies. It also plans to target global markets, specifically the Middle East, Indonesia, and the UK.  Recently, Superstar Investor Azim Premji's investment arm Premji Invest bought a stake in the company which boosted the company’s stock price.

  2. Aditya Birla Fashion: Analysts are quite enthused with the recovery of this fashion retail company’s business in Q2FY22 after being marred by lockdowns during the second wave of the pandemic. The company swung back to profits in Q2FY22 (Rs 9 crore) after two consecutive quarters of losses. Its lifestyle brands revenues recovered to nearly 95% of sales seen in H1FY20, while Pantaloons recovery was at 49% of H1FY20 levels. Analysts at ICICIdirect believe that the company’s balance sheet strength will help with store expansions, which will eventually lead to higher revenues. ABFRL plans to open over 60 Pantaloon stores and over 400 franchisee lifestyle brand stores. 

  3. Lumax Industries: This auto ancillary company’s stock hit a 52-week low ahead of its Q2FY22 results but it posted margins better than its industry peers and brokerages like Axis Direct and Chola Wealth are positive on the company’s future prospects. Lumax’s Q2 net profits stand at Rs 15 crore after reporting a net loss of Rs 9.9 crore in Q2FY22. Rising raw materials cost and shortage of semiconductors are driving the net profit lower to lower down. The result of price escalations will begin to show results in Q3FY22 and Q4FY22. With the demand scenario improving for the auto industry and the company’s decent segment mix of products for two-wheelers, passenger vehicles, and commercial vehicles, the company may witness revenue growth of 6-9% in the coming years. Lumax’s expansion into electronic components also augurs well for its future prospects as the conventional lighting segment contributed 66% to revenues in H1FY22. The segment can grow 45-50% in the next two years.

  4. Escorts: This auto company’s stock rose nearly 20% over the past week as it prepares to welcome a new large shareholder in Japan’s Kubota Corp. The Japanese company will acquire an additional 5.99% stake in Escorts through a preferential issue at Rs 1,900 per share, and will also make an open offer for a 26% stake. Many of Kubota’s subsidiaries will also probably be merged into the newly renamed entity Escorts Kubota. This deal is expected to bring newer technology and better products on the market from the Escorts stable.

  5. Sheela Foam: This foam and mattress maker’s stock was on a tear over the past one-and-a-half months. In this period, the stock is up over 36% and breached its 52-week high in this past week. This made it the most overbought stock according to technical indicators like RSI and MFI.

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