moneycontrol India Stock of the Day (January 2024)
Craftsman Automation, Asian Paints, Persistent Systems, Tata Consumer Products, Sky Gold Ltd, GAIL, Transport Corp of India, SBI Life Insurance, Data Patterns, Varun Beverages, Bosch, Trent Ltd, etc.
Indian stocks featured in their January Stock of the Day videos (from newest to oldest) and covered in this post include:
Craftsman Automation, Asian Paints, Persistent Systems, Tata Consumer Products, INOX India Ltd, Aarti Industries, Sky Gold Ltd, GAIL, Transport Corporation of India, SBI Life Insurance, Prince Pipes and Fittings Ltd, Data Patterns (India) Ltd, Varun Beverages, Bosch Ltd, Syngene International, DCB Bank, Dhanuka Agritech, Trent Ltd, Manappuram Finance Ltd & Home First Finance
Foreign investors are taking notice of India:
📰 Wall Street snubs China for India in a historic markets shift (SCMP) February 2024
Over the past two decades, India’s gross domestic product and market capitalisation rose in tandem from US$500 billion to US$3.5 trillion
India briefly overtook Hong Kong as the fourth-largest equity market last month; Morgan Stanley predicts it will be the world’s third-biggest by 2030
📰 Investors dig into India's stock market as China flounders, discount risks (Reuters) February 2024 🗃️
"It is not India or China, but India and China," says Nilesh Shah, chief executive officer of Mumbai-headquartered Kotak Mutual Fund, referring to how investors now think of the two markets.
"Since India’s premium valuation is on account of other markets not doing that well, now if they start doing well, things could change," he said. And that, he said, meant the market would need to keep delivering better and consistent earnings growth.
Domestic ownership of Indian stocks is now at 35.6%, dwarfing the 16% foreign ownership. The remainder is owned by promoters, an Indian markets term for large shareholders who can influence company policy. FACTBOX-How foreign investors can invest in India 🗃️ )
This interview is also interesting for investors concerned about corporate governance in India:
📰 Ramesh Damani on what's making Indian stock market so unique and resilient? (The Economic Times) February 2024
And the industry minister used to be an old socialist called Mr. George Fernandes. And here is where we learned the law of unintended consequences because what George Fernandes did was he told the MNCs in India at that time that either you dilute your shareholding by 40% or you get out and leave the country.
So companies like IBM and Coke left India because they did not want to dilute their shareholding. But companies like Colgate-Palmolive (India) (NSE: COLPAL / BOM: 500830), Nestle India Ltd (NSE: NESTLEIND / BOM: 500790) and Hindustan Unilever Limited (HUL) (NSE: HINDUNILVR / BOM: 500696) stayed on in India and gave shares to the public. And as history will record, the shares have gone on to become multi-bagger, 100x, 1,000x, 2,000x over a period of time but they also gave India good corporate governance. People understood how good companies behave, how good companies are managed. So we were 20, 30 years ahead of China in good corporate governance. And that is now reflecting in the markets because you have such a nice group of companies that follow the best practices globally, while China, even the best companies are now trading at 20, 30-year lows. So I think that the law of unintended consequences took place because you had Mr. Fernandes throwing the companies out because he did not like foreign capitalists but that in fact led to better corporate governance and a better pool of investable companies for India.
Getting back to moneycontrol’s Stock of the Day videos and to make your life easier, this post includes:
A quick description of the stock pick with links to the IR page and stock quote(s) on Yahoo! Finance.
A link to any Wikipedia page (for what it might be worth…)
The title of the moneycontrol Stock of the Day and their summary of what makes the stock pick interesting.
The embedded video (again, they are usually 4 minutes long).
Forward or trailing P/E and dividend yields linked back to the Yahoo! Finance statistics page.
The latest long term technical chart linked back to Yahoo! Finance.
And as always, this post is provided for informational purposes only (and to make your life easier by providing you with relevant information, links, and charts). It does not constitute investment advice and/or a recommendation…
Craftsman Automation Ltd (NSE: CRAFTSMAN / BOM: 543276) has grown to become a leader in precision manufacturing in diverse fields. It operates through Automotive / Powertrain & Others, Aluminium Products, and Industrial & Engineering segments.
CAL is the largest player in the machining of cylinder blocks and cylinder heads for CVs in India. CV segment continues to be in sweet spot with the government's thrust on economic activities. In the tractor segment, CAL is one of the 3-4 key component players providing machining of cylinder blocks in the country. Its aluminium product segment is expected to outperform driven by advanced emission norms and wider adoption of EVs.
Trailing P/E: 27.64 (no forward P/E) / Forward Annual Dividend Yield: 0.27% (Yahoo! Finance)
Asian Paints, Ltd.
Asian Paints Ltd (NSE: ASIANPAINT / BOM: 500820) manufactures a wide range of paints for decorative and industrial use and also offers Wall Coverings, water proofing, adhesives and services under its portfolio. The company is also present in the Home Improvement and Decor segment and offers bath and kitchen products. The company also introduced lightings, furnishings and furniture in its portfolio.
Recently the company entered into a definite agreement with Weatherseal Fenestration for acquiring 51% stake. Weatherseal incorporated in Mar 2022 would be engaged in the business of interior decoration/furnishing, including manufacturing uPVC windows and door systems. Asian Paints also entered into a definite agreement for acquiring 49% stake in Obgenix Software, commonly known as White Teak, which is engaged in the business of decorative lighting products and fans.
Asian Paints, the foremost decorative paints company in India, continues to report consistent double-digit volume growth, attributable to the prevailing real estate upcycle and burgeoning home improvement trends. The company enjoys a strong business moat, but the emergence of new competitors poses some concerns on the margins going ahead.
Forward P/E: 55.56 / Forward Annual Dividend Yield: 0.89% (Yahoo! Finance)
Persistent Systems (NSE: PERSISTENT / BOM: 533179) is a digital engineering and enterprise modernization partner set up in 1990 by an Indian repat who worked for HP Labs (See: Persistent Systems (NSE: PERSISTENT / BOM: 533179): One of India's Fastest Growing IT Firms You Probably Have Not Heard Of).
Persistent has been a growth leader and the trend continues albeit the challenging macro. With a great order booking the future trajectory looks promising and the company has multiple levers for margin expansion. The sector is standing at the crossroads of a massive disruption ushered in by GenAI and Persistent is upping its game in this area.
Forward P/E: 34.48 / Forward Annual Dividend Yield: 0.51% (Yahoo! Finance)