Ashika’s Latest Stock Recommendation – That Can Fetch Up To 14% Upside (15-11-2023)

Aptus Value Housing Finance has best in class Return on Assets (ROA) of 8 percent plus while PI Industries has a strong track record of an industry-beating Compound annual growth rate (CAGR) of 18 percent in FY16-23 and a sustainable margin profile.

Here’s are stocks recommended by Ashika Research which can fetch up to 14% upside:

Aptus Value Housing Finance :

CMP: Rs 300 | Target: Rs 335 | Upside: 11.4%

• Aptus Value Housing Finance is a retail focused housing finance company, which primarily serves low-income and middle-income self-employed customers in rural and semi-urban markets. Its primary focuses on non-salaried category, which forms 721 percent of its portfolio and majorly comes from Tier-III and Tier-IV centers having no income proof like ITR and salary slip etc.
• It has always maintained NIMs close to 14 percent mark, despite having not tinkered with the home loan rates much and kept it close to 17 percent over the years and the change in NIMs have played out through change in cost of borrowings. 
• Opex (percentage of assets) have been kept under 3 percent for the last three years, thus resulting in best in class Return on assets (ROA) of 8 percent plus. It has developed customized underwriting processes for low-income customer segments with a healthy mix of technology as well as brick and mortar model.

PI Industries Ltd:

CMP: Rs 3686 | Target: Rs 4,200 | Upside: 14%

• PI industries has built a strong business model by strengthening its presence in the CSM segment in the agrochemical industry. Going ahead, it aims to diversify into the pharmaceutical segment and other niche chemistry. 
• The company continues to build a strong domestic agrochemical franchise with the launch of better products in the crops and pesticide segments over the years. The company’s focus on export CSM has been the key differentiator compared to other agchem/chemical players in India.
• PI Industries has a strong track record of an industry-beating Compound annual growth rate (CAGR) of 18 percent in FY16-23 and a sustainable margin profile. The company’s moat lies in its strong export-focused CSM business, as no other Indian player offers the width and consistency that PI does. 
• The firm is banking on this factor by consistently launching new molecules. It works with 20 global innovators, manufacturing over 25 products on a commercial scale and evaluating over 60 molecules in their R&D center. Further, the company has reported strong Q2 FY24 performance on all fronts driven by agro chemical exports.

Disclaimer: The information provided in this blog post is for informational purposes only and should not be construed as investment or trading advice. The author is not a financial advisor and does not have any professional qualifications in this area. The author does not guarantee the accuracy or completeness of the information provided. Any action you take based on the information in this blog post is done at your own risk. Please consult with a financial advisor before making any investment decisions.