The government revised its growth forecast for the year ending March 2016 to 7.5% from 8% as per the midyear economic review tabled in Parliament. Led by heavyweight stocks like Reliance Industries and ITC, the Sensex fell 284 points to settle at 25,119 levels while the Nifty fell 84 points to settle at 7,761 levels suffering a sharp setback on Friday, relinquishing most of the gains made in the previous session. The midyear economic review stated that though the country’s macroeconomic stability has improved considerably in the last few quarters but this improvement in growth is quite uneven. The demand outlook runs the risk of increasing debt burden and slowing the investment revival. In the “primary market and others” category, foreign portfolio investors have pumped in Rs 21,156 crore for the calendar year 2015 till date. This compares favourably as against the same period last year the figure was only Rs 12,615 crore within the same category. The outlook looks better for our stock market next week with many brokerages seeing higher levels in the short-term after the initial selling by foreign investors due to year-end constraints.
Avanti Feeds Ltd is one of the largest seafood processors and leading manufacturers of prawn and fish feeds having started commercial operations in 1993. Over the years it has expanded capacity and established a joint venture with Thai Union Frozen Products, Thailand, which is the world’s largest seafood company. It has three world class manufacturing units in Andhra Pradesh and Gujarat. The total Indian seafood product exports recorded a major jump of 16% in value terms during 2014-15 standing at Rs 35,000 crore and the demand for it is increasing all over the world as it is considered healthier than meat. With a gifted long coastline, India is ideally suited for development of the seafood industry. With net sales and net profit of the company expected to grow at a CAGR of 40-50% over the next few years, the earning-per-share is also expected to keep pace at a healthy Rs 36 and Rs 42 respectively. At the current market price of Rs 475, the Avanti stock is a Buy with a target price of Rs 565 for medium term investment.
SMS Pharma is an integrated global pharma company focusing on API manufacturing and is the largest producer of anti-ulcer products. There have been recent positive development for the company like successful USFDA inspection at their Andhra Pradesh facility, amicable settlement of the legal dispute with Natco Pharma and large investment plans of over Rs 900 crore in their Andhra Pradesh plant over the next few years. Robust product portfolio, multi product facilities, two research centres and over 1,000 employees has catapulted SMS Pharma to the forefront of the Indian Pharma sector. The stock currently quoting at Rs 120 on the Indian bourses can easily appreciate to Rs 155 in the next 12 months.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.