You must have read many times in the news that in 1 month FII invested Rs. 11,427 crore in net buy and sale.
FIIs ie Foreign Institutional Investors have a huge role to play in driving the Indian stock market
as they bring a huge amount of money inflow with them.
And FIIs are generally considered to be informed and educated investors,
so investors often want to know which stocks FIIs are investing their money in.
So today I will tell you 5 such stocks in which FIIs have increased their stake the most in the March 2023 quarter.
To filter these companies, we have selected only those companies.
Then, out of the companies we found, we selected 5 such companies in which FIIs have increased the maximum stake.
The company in which FII has increased its holding the most, we will cover last. So let's start today's list.
The first company is Shriram Finance Ltd.
Shriram Group established Shriram Finance by merging Shriram City Union Finance with Shriram Transport Finance Company.
On 30 November 2022, Shriram Group officially named a merged entity as Shriram Finance.
Shriram Finance, a pioneer in commercial vehicle financing, and Shriram City Union Finance, a pioneer in 2-wheelers and MSME financing,
formed from the merger of Shriram Transport Finance which is one of the largest NBFCs in India.
FII has raised its stake in Shriram Finance to 4.23% in the March 2023 quarter.
The company's product portfolio includes commercial vehicle loans and business loans
that cater to the entire commercial vehicle ecosystem, from the company's customers and dealers to the private financier.
In addition, the company also provides services like
and emergency credit line guarantee schemes for MSMEs.
As of March 2023, about 50% of the company's AUM is involved in commercial vehicle loans.
Shriram Finance has around 3,000 branch offices, which must cater to 7.32 million customers.
A positive for the company is that its housing finance subsidiary is witnessing healthy growth.
Their housing finance subsidiary Shriram Housing Finance has grown its AUM by 50.26% on a YoY basis.
With this, their PAT ie profit after tax has increased by 71.45% on an annual basis.
At a consolidated level, a business risk for Shriram Finance is that their end users
such as MSMEs and road transport operators are directly affected by the growth and slowdown of the country.
And when their business fluctuates as per the economic cycle, it is obvious that Shriram Finance's numbers will also be affected.
Let us now look at some key financial figures of Shriram Finance,
and compare them with its listed peers Cholamandalam Investment & Finance Company Ltd. and Sundaram Finance Ltd.
Both of them are involved in vehicle finance like Peers Shriram Finance Ltd.
Coming to valuations, P/B is considered more relevant than P/E for banks and NBFCs.
While Shriram Finance has a P/B ratio of 1.2 times,
Cholamandalam Investment & Finance has a P/B ratio of 6.4 times and Sundaram has 2.86 times.
In terms of AUM growth, Cholamandalam Investments has recorded the highest growth of 38.00% in the last 1 year.
And if we talk about ROA i.e. Return on Assets, both Shriram Finance and Sundaram Finance have similar ROA
but Cholamandalam is leading with 3.8 times ROA.
In terms of returns, during the last 1 and 5 years, Cholamandalam Investment & Finance has created maximum wealth for its investors.
Shriram Finance's Net Interest Income, which is considered the core income of banks and NBFCs,
in the last 1 year stood at Rs. 9316 cr to Rs. 16,963 crore
it is an astonishing 82.08% jump, and much better than Cholamandalam.
The second company on our list is Campus Activewear Ltd.
Campus Activewear is India's leading sports and athleisure footwear brand.
Athleisure is such a product and in the case of campus footwear, you can use it for exercise as well as in normal routine.
It manufactures and distributes Running Shoes, Walking Shoes, Casual Shoes, Floaters, Chappals, Flip Flops, and Sandals.
The company is India's largest sports and athleisure footwear brand in high terms of both value and volume.
FIIs have raised their stake in Campus Activewear to 6.26% in the March 2023 quarter.
Campus Activewear is currently present in 28 states and 650+ cities with 20,000+ retailers.
The company has 425+ distributors and 150+ internal sales forces.
The company's footwear is also available on e-commerce websites like Flipkart and Amazon.
The company is also expanding its offline D2C presence through EBOs ie Exclusive Brand Outlets, with more than 200 EBOs already.
By sales channel, in FY23 Campus has around 55% revenue through the distribution channel and 45% through the D2C channel.
One of the key strengths of the company is its established market position and strong brand name.
With a 17% market share in the sports and athleisure segment, the company is well positioned.
With this, the company has developed a vertically integrated manufacturing ecosystem.
A combination of in-house manufacturing and outsourcing will achieve an annual capacity of 34.8 million pairs to be assembled on campus.
However, one of the challenges for Campus is the fierce competition in the Indian footwear space
with organized as well as a host of unorganized players such as Bata, Liberty, Lancer, Relaxo, Adidas, Nike, and Puma.
On top of that campuses predominantly have a 'low cost' segment, so, this competition is always going to put pressure on their margins.
Let us now have a look at some of the key finances of the company.
We will also compare Campus with peers such as Relaxo Footwear and Bata
as all three companies are involved in the athleisure and sports footwear segments, with similar target audiences.
Talking about valuations, while Campus is trading at a PE of 83.36, Relaxo is trading at a PE of 148.
Let me tell you that the company is trading at a lower PE.
However, Campus has outperformed its peers in terms of sales growth and ROE.
In terms of returns, only three companies have not given any significant returns in the last 1 year,
but the campus here has performed better than its peers.
The next company is Jindal Stainless Ltd.
Jindal Stainless is one of the largest stainless steel products manufacturers in India,
Its products find applications in many industries- architecture, building construction, automobile and railway, engineering and consumer durables, etc.
FIIs have raised their stake in Jindal Stainless from 8.87% in the March 2023 quarter.
71% of the company's revenue comes from India, and the rest from the export market.
Jindal Stainless Ltd.’s major manufacturing units are located in Orissa and Haryana with a combined capacity of 2.9 MT per annum.
Talking about the merits of the company, the company has continuously reduced its debt in the last few years.
Jindal Stainless has reduced its long-term debt on the back of its strong operating performance.
Their Debt to Equity ratio was 3.4x in FY16 and has improved significantly today to 0.2x in FY23.
Similarly, their Net Debt to EBITDA trend also portrays their operating efficiency and deleveraging.
Their net debt used to be 11 times their operating profit in FY15, and today it is only 0.7 times.
But Jindal Stainless's major weakness is that it faces stiff competition from Indonesia and China.
Even though the company is a top player in the stainless steel segment in India,
these exporters have abundant cheap nickel deposits because of the low cost of manufacturing in these countries.
As a result, margins on Jindal Stainless have come under pressure.
Let us compare Jindal Stainless with its nearest competitor APL Apollo Tubes.
Though APL Apollo Tubes is not involved in a diverse range of stainless steel products like Jindal Stainless,
it is also India's leading steel products manufacturing company.
Looking at valuations, Jindal Stainless is trading at a much lower multiple in P/E terms than APL Apollo Tubes.
But in terms of EV/EBITDA, Jindal Stainless trades at just 7.87 times, while it trades at 34.10 times for APL Apollo Tubes.
EV/EBITDA is a financial ratio that helps in comparing the value of a company with its earnings.
Here EV stands for Enterprise Value which refers to the total value of the company.
In terms of returns, Jindal gave 217.62% returns over 1 year, outperformed APL Apollo,
while over 5 years, APL Apollo has given better returns.
The fourth company is Go Fashion Ltd.
GFIL i.e. Go Fashion India Ltd. is one of the largest women's bottom wear brands.
A wide range of women's bottom wear products are marketed under the brand name Go Fashion Go Colors.
The company has an 8% market share in this segment.
It has a wide range of product portfolios across ethnic wear, western wear, fusion wear, athleisure, denim, loungewear, etc.
FII has raised its stake in Go Fashion to 10.20% in the March 2023 quarter.
Looking at Go Fashion's reach, the company today has 630 EBOs (Exclusive Brand Outlets) across 143 cities in India,
of which 191 are in airports and malls, and 439 are in high streets.
In addition, they also have 1,750 large format stores.
A positive for the company is its operational efficiency.
Talking about their working capital days, the number has improved from 190 days in FY22 to 149 days in FY23.
This is primarily due to a significant improvement in the company's inventory days.
Go Fashion has been upgrading its warehousing operations, and has brought down its inventory days from 151 days to close to 4 months.
Management says that they want to bring it down further to 90-100 days in the coming time.
One risk for the company is its geographic concentration.
Their flagship exclusive outlet and other large format stores are present in South India.
Go Fashion is continuously expanding to other geographies as well, but currently, its operations are focused on South India.
So as long as their new stores are yet to operate, it could prove to be a revenue concentration risk for the company.
And this puts them at a disadvantage against brands with a pan-India presence.
Let us now look at some key financial figures of Go Fashion,
and compare them with Cantabil Retail India Ltd. and Monte Carlo Fashions Ltd., its listed rivals in the readymade garments and apparel sector.
Talking about valuation, Go Fashion is trading at a much higher P/E than both companies.
Now, while Go Fashion has not outperformed its peers in terms of sales growth, Cantabil Retail's ROE is the best among the three.
And today's last company is Sona BLW Precision Forgings Ltd.
It is an automotive technology company primarily involved in the business of automotive systems and their components.
It is involved in designing, manufacturing, and supplying assemblies, gears, and conventional and micro-hybrid motors across vehicle categories.
Similarly, it is also engaged in the business of Belt-Starter Generators or BSG Systems and Electric Vehicle Traction Motors.
FII has raised its stake in Sona BLW Precision Forgings to 13.42% in the March 2023 quarter.
A major strength of the company is its strong order book.
At the end of Q4FY23, Sona BLW has a net order book of Rs 215 billion, which is almost 8 times its FY23 revenue.
Having a strong order book gives visibility and promise of long-term and consistent revenue.
However, in FY22, the company's top 5 customers contributed 45% of its revenue.
If even one of these clients says goodbye to the company in the future, it can have a profound impact on the company's financials
Let us now look at some key financial figures of Sona BLW,
and compare them with its listed peers Mahindra CIE and Ramakrishna Forgings.
Talking about valuations, Sona BLW Precision Forgings is trading at a much higher P/E than both companies.
In terms of sales growth in the last 5 years, Sona BLW Precision Forgings has outperformed its peers by a good margin.
In the last 1 year, where Sona BLW has given negative returns to its investors, both the peers have given 150% returns.
So that's it for today's video.
Which of these companies is in your portfolio? And what percentage of returns have these companies given to you?
Tell us in the comments.
We remind you that these videos are for educational purposes only, and are not a recommendation to anyone to buy or sell.
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