Stocks to buy with Anil Singhvi: Here are Vikas Sethi’s top two picks Snowman Logistics, Bank of India
Sethi gave two calls today both from cash market. Vikas Sethi said looking at the volatility in the market and understanding that since tomorrow it is expiry, he is avoiding picks in futures and recommending buying in cash stocks as he is bullish on both the companies.
Zee Business Managing Editor Anil Singhvi, in the latest episode of ‘Sadabahaar Sethi Saab’ show, talked to market analyst Vikas Sethi and asked him to reveal his top picks that can generate good returns for investors. Sethi gave two calls today both from cash market. Vikas Sethi said looking at the volatility in the market and understanding that since tomorrow it is expiry, he is avoiding picks in futures and recommending buying in cash stocks as he is bullish on both the companies.
First Pick: Snowman Logistics
Picking Snowman Logistics as his first pick, he said that this company is one the leading cold storage warehouse companies of India. Q2 results of the company have been extremely robust; growth for the warehousing segment was extremely good. The get business from food industry, pharma industry and works for Amazon (retail based) company as well. Management of the company is extremely confident about the future prospects of the company and so they are increasing company’s capacity by 20%. World is waiting for the vaccine to arrive in the market, whether Pfizer or Moderna gets the vaccine, specialists are saying that vaccine has to be transported in temperature of -17 to -20 degree.
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Snowman is likely to benefit from this which is the key reason for which the stock has been picked today. Adani Ports now owns Snowman Logistics; they have purchased the company from Gateway Distriparks (GDL). Adani group is one of the leading business groups in India. Adani groups has acquired stake 40.25% stake at Rs 40 from GDL. Some of the Adani Group stocks like Adani Enterprise, Adani Green, Adani Gas and Adani Transmission have done extremely well this year. The stock can do extremely well if investor can hold for next 6 months. Short term target on this stock is Rs 62 with stop loss of Rs 52. This stock can see levels of Rs 85 to Rs 90 in long term.
Zee Business Managing Editor Anil Singhvi highlighted that management of the company has indicated that they are fully prepared for the transportation once the vaccine has been developed. Company can manage temperature between -20 to -30 and transport it from one location to another. Cold Storage, warehousing facilities and distribution facilities via logistics (trucks) are absolutely ready to function. Logistics Companies which are ready to transport vaccine will get huge benefit because of vaccine development. Singhiv highlighted that the acquisition has not been done as yet.
Second Pick: Bank of India
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Punjab National Bank, Bank of Baroda and Canara Bank have performed extremely today, all being up 4%-5%. Q2 results of Bank of India were fantastic, above analysts’ estimates on all counts. Net profit of the company have improved to Rs 543 cr from Rs 257 cr last year, Gross NPA improved to 13.79 from 16.31 while Net NPA improved to 2.87 from 5.87. Bank of India has biggest exposure to Future Group among all the banks, deal between Future Group and Reliance Industries will benefit Bank of India. Overall, all banks have exposure of Rs 12000 cr to Future Group, out of which Bank of India’s exposure to Future Group is 5750 cr. On short term basis, target is Rs 51 and stop loss is Rs 42.
Anil Singhvi said that IOB and Bank of India have similar business models, while balance sheet of Bank of India is much better than IOB. If IOB can resolve NPAs worth Rs 16000 – Rs 18000 cr then Bank of India can easily resolve NPAs worth Rs 25000 cr.
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