Brightcom group(BSE Code 532368)

A knowledgeable HNI (High Netwoth Investor) suggests accumulating Brightcom group shares as he is surprised that even after a robust financial performance and a 2:3 bonus issue, the share price has charted a downward course. The company has registered a 168 per cent spurt in consolidated net profit at Rs 371 crore for the quarter ended December 31, 2021, as compared to Rs 139 crore in the corresponding quarter a year ago. This follows a 130 per cent spurt in consolidated revenues at Rs 2,021 crore during the quarter as compared with Rs 878 crore in the same period last year

The impressive performance of the company is being attributed to increased consumer usage of digital media and digital channels to conduct commerce across the world, as post-pandemic technologies across the industry have reached a steady state, cutting down spurious traffic and thereby contributing to higher effective cost per impression

The company is growing at a fast clip and can boast of an impressive client list, its top 10 clients being Net Media, Mediacom, Mindshare, Mobrain Digital, Havas Media, Mercardo Libre VE, Telephonic de Argentina SA, Envision Media Taranis AG and Bayer AG.

What is more, during the December quarter, the company added 43 new publishers, 12 new ad agencies and 10 new direct advertisers.

According to Suresh Reddy, Chairman and Managing Director, Brightcom provides comprehensive online or digital marketing services to direct marketers, brand advertisers and marketing agencies. The target future cash flow for fiscal 2022 remains at Rs 260 crore and is slated to reach the Rs 500- crore mark by June 2022.

However, surprisingly, the share price of Brightcom has charted a downward course, declining during the last one month from Rs 180.95 on January 18, 2022 to Rs 141.55 on February 18, 2022. This is despite the fact that the company has given 2,209.14 per cent returns to investors during the last one year.

FTSE GEIS Semi-Annual Review (Mar-2022) Rebalance to take place on Thursday, 17 March 2022 when Bright com will be included in the global equity index series. Changes effective from Monday, 21 March 2022 - Investec Trading.

(CMP Rs 117.05, 52 week H/L Rs 205/5, BV Rs 17.20, FV Rs 02)

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Elgi Equipments(BSE Code 522074)

HNIs (high networth investors) and leading retail investors of Elgi Equipments, the second largest manufacturer of air compressors in the country, are concerned whether the rising cost of production on account of increasing commodity prices and supply chain disruptions on account of the third wave of the pandemic will adversely affect the performance of the company in the current fiscal ending March 2022 and the first quarter of fiscal 2023. But two knowledgeable observers of the air compressor scenario in the domestic as well as the global market are optimistic that even as company's performance was impacted during Q3FY22 with less than expected numbers, the prospects for Q4FY22 and Q1FY23 are quite promising and Elgi will re-enter the growth path going ahead.

Maintains one observer, "Though the Q3FY22 performance was not as per our expectations, still it was decent with consolidated revenues growing by around 20 per cent (against expectations of 22 per cent) at Rs 1,655.6 crore and the EBITDA margin coming in at 11.3 per cent (against expectations of 12.6 per cent). The supply chain is improving fast and the numbers for Q4FY22 are expected to be quite heartwarming."

Another expert opines that demand for the company's oil-free compressors is on the rise in several export markets and may contribute more than 55-60 per cent of the company's topline going ahead. "So all will be well on the financial performance front in the current as well as coming quarters. I would suggest that investors buy Elgi with the price target of Rs 415 in mind," he says. He believes that going forward, accelerated growth in international markets, products like disrupted AB series compressors, good traction in the India business and a widespread domestic business cost rationalization campaign will drive long-term growth.

(CMP Rs. 330.50, 52 week H/L Rs. 423/173, BV Rs. 28.80, FV Re. 01)

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Suprajit Engineering(BSE Code 532509)

An investment banker is bullish on Suprajit Engineering, the largest supplier of automotive cables to domestic OEMs with a presence across both 2-wheelers and personal vehicles. Over the years, Suprajit has evolved from a single product/ client company in India to having a diversified exposure. This, coupled with its reputation as a low-cost player, has enabled it to gain marketshare and more business from existing customers. The company has outperformed the Indian auto industry in recent years (posting positive growth vs low double-digit declines for the domestic 2W and PV industry in FY21). The company believes that consolidation of vendors and new client additions would help in maintaining the trend of market/ wallet share gains. Suprajit has grown profitably over the years and as a result boasts of a strong balance sheet (net cash). The investment broker believes Suprajit is a prime beneficiary of the ramp-up in production by OEMs across the globe and is well insulated from the threat of EVs by developing new products. Its premium valuations are justified by a strong outlook.

(CMP Rs. 304.15, 52 week H/L Rs. 478/240, BV Rs. 73.10, FV Re. 01)

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Apollo Tyres(BSE Code 500877)

A research analyst with a leading stock broker is bullish on Apollo Tyres, a leading automotive tyre company which mostly meets demand in the domestic as well as the European market. The company has five manufacturing facilities in India, one in the Netherlands and one in Hungary. It generates around 69 per cent of its revenues from India, 26 per cent from Europe and 5 per cent from the rest of the world. Five years ago, Apollo Tyres entered the two-wheeler tyre segment with contract manufacturing. Needless to say, the company is doing very well on the financial front. During the last five years, its sales turnover has expanded from Rs 8,934 crore in fiscal 2017 to Rs 11,733 crore in fiscal 2021. However, the profit at net level has not moved up. In fact, it has declined from Rs 803 crore to Rs 723 crore during this period, and the drop is being attributed to the subdued trend in the automobile industry, mainly on account of the pandemic.

Prospects for the company going ahead are highly encouraging as the impact of the pandemic is on the decline and demand for tyres is expected to increase going ahead. Again, the company and Tata Power have announced a strategic partnership for the deployment of public charging stations across India. These charging stations will be deployed at Apollo Tyres commercial and passenger vehicles zones spread across the country. This business is certain to be quite profitable.

(CMP Rs. 183.15, 52 week H/L Rs. 262/176, BV Rs. 181.90, FV Re. 01)

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IPCA Laboratories(BSE Code 524494)

The atmosphere in the board room of IPCA Laboratories is presently gloomy over its poor performance during Q3FY22. While revenues during the October-December 2021 quarter rose fractionally by 1.5 per cent, the profit at net level dropped sharply by 26.3 per cent yoy to Rs 197 crore. The poor performance during Q3 of the current fiscal is attributed to a dip to the tune of 12 per cent in APIs and a market increase in the cost of production. However, a senior research analyst of a leading brokerage house, who has been tracking the pharmaceutical industry for the last 15 years, is highly hopeful about its future prospects. According to her, the worst is over on the API export front for the company and export demand will pick up from Q4 of this fiscal if the growing order book is any indication. Again, the company's greenfield plant at Dewas in MP is fast coming up and is most likely to be commissioned within the next 11 months.

This plant would substantially improve the company's backward integration and push up the topline as well as the bottomline. The company has started doing very well on the formulations front and domestic demand, which recorded a 23 per cent rise during Q3, is on the rise during the current Q4. The management is confident of the company's domestic formulations demand outpace industry growth by 1.5 times.

(CMP Rs. 972.35, 52 week H/L Rs. 1384/899, BV Rs. 207.50, FV Re. 01)

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Ircon International(BSE Code 541956)

A research analyst working with a leading stock exchange firm, who primarily tracks PSUs, is all praise for Ircon International, which according to him is working like a private sector enterprise. It is a mini-ratna (category-1) PSU which primarily works on implementation of railway projects.

Vikas Nigam is citing the creation of synergies and the removal of duplication that would result from a merger of the two. As both companies are engaged in the construction of railway infrastructure, experts believe the restructuring will create a monopoly, improve capital allocation and create solid portfolio.

The company was doing quite well on the financial front till over a year ago but Covid-19 hit the company's top as well as bottomline. The sales turnover during the last five years moved up from Rs 3,024 crore in fiscal 2017 to Rs 5,202 crore in fiscal 2020, but last year it declined to Rs 4,948 crore. Likewise, the profit at net level climbed from Rs 295.16 in FY17 to Rs 490 in FY20 before declining to Rs 404.56 crore in FY21. As the impact of the pandemic is on the decline, prospects for the company are on the upswing. The

company's financial position is very strong, with reserves as on March 31, 2021 standing at Rs 4,312 crore - over 43 times its equity capital of Rs 99 crore and that too after two liberal (both in the ratio of 1:1) bonus issues.

(CMP Rs. 40.40, 52 week H/L Rs. 54/39, BV Rs. 48.60, FV Rs. 02)

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Oil India Ltd.(BSE Code 533106)

One man's meat is another man's poison! Likewise, the runaway rise in crude oil prices accentuated by the UkraineRussia conflict has adversely affected the economies of several developing countries and made the life of the common man miserable, but on the other hand it has a enriched the balance sheet of oil extracting companies like Oil India (OIL). The company's operational performance brought cheer in the Duliajan campus thanks to a 10 per cent higher oil realization at $ 7,816 per barrel, while EBIT from the gas business shot up 24.4 per cent qoq to Rs 1,199 crore and the standalone net profit surged ahead by 147 per cent to Rs 1,267 crore. Enthused by these figures, the company's board of directors declared an interim dividend of Rs 5.75 per share, taking the total dividend to Rs 9.25 per share.

Prospects ahead are considered quite hopeful if crude oil prices do not fall drastically globally. At home, gas prices are expected to go up from April 2022. This is a highly positive point for the company. According to experts, the recent spurt in crude oil prices and expectations of a further steady hike in domestic gas prices from the beginning of fiscal 2023 could drive a 40 per cent CAGR in OIL's standalone net profit over the next 2 years and increase the RoE to 12.5 per cent from only 5.4 per cent in fiscal 2021.

(CMP Rs. 223.15, 52 week H/L Rs. 268/112, BV Rs. 259.40, FV Rs. 10)

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