Stocks to buy with Anil Singhvi: Short-term gains in mind? Himadri Specialty Chemicals and Andhra Sugars are Vikas Sethi picks

In his chat with Market Guru Anil Singhvi, analyst Vikas Sethi revealed two stocks on Wednesday. He picked Himadri Specialty Chemicals and Andhra Sugars as his short term stocks to buy. Research, experience, hard work, enterprise, vision and much more are required to make the correct calls to earn money on stock markets and that too in times of coronavirus, when so many fresh triggers are being generated out of nowhere. In this scenario, that is exactly what Zee Business Managing Editor Anil Singhvi is doing - helping investors make the right choice and earn money through his show - #SPLMidcapStocks 

1st pick: Himadri Specialty Chemicals  

This is a specialty chemical company which operates in 3 key segments. Himadri Speciality Chemical is the largest Coal tar pitch manufacturer in India with over 70% market share in the space. The detailed quality processes ensure that it is the preferred material for use as a binder in the manufacture of Aluminum anode and graphite electrode. Himadri Specialty Chemicals has developed and supplied a special grade of coal tar pitch to DRDO. Himadri has requisite approvals from the major Global and Indian Aluminum and graphite manufacturers. These are customized product, made specifically to suit customer requirements and desired quality specifications. 

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With access to superior, consistent and customized raw material feed from its in-house distillation unit and after its success in launching rubber grade series of carbon black, Himadri Specialty Chemicals has successfully launched and marketed its specialty carbon black range that are high-performance and cater to niche applications in plastics(food and non-food grade), fibre, coatings and inks, among others. They are commonly used in inks, paints, plastics master batches, wire and cable etc. 

The capacity has been increased to 180000 ton from 120000 ton. Himadri Specialty Chemicals manufactures high quality anode material for Li ion battery. These batteries power Electric Vehicles, consumer devices like Smartphones, and Energy Storage devices. Himadri is the first and only Indian producer to commercially produce the Li-ion battery Anode material in India. 

Promoters have good stake in the company and there is no pledge on the shares of the company. The operating margins of the company had been around 21%, return on equity is around 18%, debt equity ratio is around 0.2. Expansion within the company has been done via internal accruals, benefit of which will be visible going forward. 

The target on Himadri Specialty Chemicals stock is Rs 52 with stop loss of Rs 44. 

2nd pick: Andhra Sugars 

Sugar sector seems to be strong and looks good from current levels. Sethi likes Andhra Sugars in Sugar space. The valuations of the company are extremely attractive at current levels. The company has diversified operations by setting up a Chemicals & Fertilizer division in 1960 at Kovvur. They are now producing different chemicals which go as basic building blocks to a host of industries like Pharmaceuticals, paper, textiles, pesticides, water treatment. Andhra Sugars is the first Indian company to develop indigenous technology for the manufacture of Aspirin with in house R&D efforts.  

Fundamentally the company is extremely strong. Dividend yield of the company is around 6%. Brazil and Thailand are the major producers of sugar in the world. The production of sugar has fallen in both these countries. Internationally sugar prices have risen sharply. These will benefit Indian sugar companies going forward. 

The target Andhra Sugars stock is Rs 350 with stop loss of Rs 315.