Hello friends.
2022 is expected to see higher liquidity across the globe, with different central banks increasing their benchmark interest rates.
They want to combat inflation and create additional liquidity in the economy.
This increased rate cycle is expected to drive real income property returns in the economies.
These emerging markets can pad a huge indirect impact on India.
With year-low interest rates and additional liquidity regimes, FPIs and FIIs invest in emerging markets for higher returns.
But now that liquidity is s running low and interest rates are up, for which FPIs and FIIs can work out their allocation from emerging markets like India.
FIIs have made net sales of Rs 1.71 lakh crore from January to April 2022.
But this trend will not be reflected everywhere and there will be some companies that will be running in front of this trend.
At a time when FPIs and FIIs are mostly dealing in emerging market equities, then the companies where these FIIs are increasing their holdings must have something special.
That's why today we will tell you about such stocks which have seen an increase of more than 2% in foreign holdings in March 2022.
Of course, this does not mean investing blindly in these companies too. Before investing in any company, you should do good research about it.
In this video, we will cover all about the business of stocks and also their key strengths and potential risks or weaknesses.
A holistic view of companies to help you in miles.
In addition, in the end, we will look at some key financial and technical metrics for all companies in one table.
We have selected the stocks, taking care that these companies are fundamentally strong, so in this list, we will tell you about the stocks whose:
Market cap of more than ₹10,000 crores, Return on Equity (ROE) is more than 15%,
Change in FII holding is of more than 2% in the previous quarter.
We will consider the closing price of 27th May 2022 to calculate the returns of our list.
In this list, we will tell you these stocks in ascending order i.e. the stock that has changed the most in FII holdings, we will tell you at the end.
So let's start today's list.
The first company is Indus Towers.
Indus Towers, formerly known as Bharti Infratel, is the largest telecom tower company in India.
This company builds, owns, and maintains Telecom Towers.
The company's FII holdings had grown by 2.15% in Q4FY22.
The company's biggest strength is its telecom tower space.
As of March 2021, Indus Towers has 1.85 lakh towers and 3.35 lakh co-locations in 22 circles.
Is the industry dominant? The establishment of a 5G network in India can get a bigger market share in the future.
The major weakness of the company is the industry in high CAPEX requirement which may face working capital issues.
The telecom tower industry is very capital intensive, with companies building new towers in under-patterned areas in order to expand the coverage area.
As you can see on your screen, we have shown some key financial and technical ratios of the issuing company.
We have included a valuation ratio in the form of price-to-earnings ie P/E ratio. Return on Equity i.e. ROE is included as the Profitability Ratio.
Apart from this, we have also included 5 years of sales growth in all the companies so that you get the idea, of how fast the business of these companies is happening.
We have displayed 1-year and 5-year returns of all companies to differentiate short to medium-term (1 year) and long-term (5 years) stock performance in the companies of our audience.
And finally, we have also included the prices of 2 technical indicators so that you can see the stocks from a technical perspective.
We have used 2 indicators- 200 days simple moving average i.e. 200 days SMA and RSI (14).
If a company's stock price is trading above the 200 DMA, the stock can be considered bullish.
And if the price is trading down as compared to the 200 DMA then the stock can be said to be bearish.
As for the RSI, an RSI value above 30 is generally considered oversold, and a trend reversal is likely to lead to an uptrend.
Similarly, an RSI value above 70 is considered overbought, and a trend reversal is likely.
Another company is Coforge.
Coforge is an IT services company that is one of the top 20 software solution providers in India.
The company was earlier known as NIIT Technologies.
The company's FII holdings had grown by 3.28% in Q4FY22.
The biggest strength of the company is its growing order book. They have taken up $1.15 billion worth order in FY22
The executable order book over the next 12 months grew from $520 million in Q4FY21 to $720 million in Q4FY22.
The company's major weakness is the high competition in the Indian IT sector and its high customer concentration.
23% of total revenue in FY22 came from the top 5 customers.
This means that if the company loses any of these clients then it can have a negative impact on its business.
As you can see on your screen, we have shown some key financial and technical ratios of the issuing company.
The third company on our list is KEI Industries.
KEI Industries is primarily present in cable and wire manufacturing.
This company is also involved in power and transmission projects in EPC i.e. Engineering Procurement and Construction format.
The company's FII holdings had grown by 3.44% in Q4FY22.
The biggest strength of the company is its large distribution network. They have more than 1650 dealers.
The company is present in the industry for a lot of years due to which it has been able to establish itself well in the EPC segment also in the last 12-13 years.
One of the weaknesses of KEI Industries is the high competition in the electric cable sector including organized players such as Havells, Polycab, Finolex, and unorganized players.
So these companies have limited pricing power and their operating profit margins are around 10-11%.
Now you can see some key financial and technical ratios of KEI Industries on the screen.
The fourth company that we will talk about is Angel One.
Angel One is one of the leading stock brokers in India.
They are involved in the business of stock, commodity and currency broking, institutional broking, margin trading, depository services, and mutual fund distribution.
The company's FII holdings had grown by 3.52% in Q4FY22.
The company's biggest strength is its brand reach and technology focus.
94% of new customer additions in Q4FY22 reflect the strong reach of the company in Tier 2 and 3 cities.
The company is striving to become a fintech marketplace in the future where it can sell a variety of financial products that can increase its total addressable market and cross-selling potential.
Angel One's biggest weakness is the high competition in its operating segment.
This segment includes many big banks like HDFC Bank and ICICI Bank, NBFCs like Bajaj Finance and Paytm, and also new-age startups.
Doing this it is very difficult to maintain market share in this sector.
As you can see on your screen, we are showing some key financial and technical ratios of the issuing company.
The last company we will talk about is Brightcom Group.
Brightcom Group is a digital marketing solutions provider.
They provide ed-tech, software solutions, and AI/machine learning solutions to digital marketers, brand advertisers, and marketing agencies.
The company's FII holdings had grown by 10.28% in Q4FY22.
The biggest strength of the company is its association with big brands.
Apart from this, the focus of companies on digital marketing is increasing and this trend can be benefited Brightcom Group.
Before investing in the company, you should keep in mind that the promoters' stake in the last 2-3 years has come down.
This stake has come down from 39.14% in June 2019 to 18.47% in March 2022.
The low promoter stake doesn't need to be a negative point. But sometimes it is considered a negative aspect as promoters have inside information about the company.
If they have sold their stake, it may be that they do not see future potential in the business.
Besides, some discrepancies were found in the company's performance disclosure recently, due to which SEBI also ordered a forensic audit.
As you can see on your screen, we are showing some key financial and technical ratios of the issuing company.
So these were the 5 companies for you in which FIIs have increased their stake.
Tell us in the comments which of the companies are in your portfolio.
Also, tell us on which topic you want to watch videos.
This is for today, Thanks for joining.