Yes Securities has rejigged its model portfolio for investors. The domestic brokerage has added Bajaj Auto, Ajanta Pharma, Credit Access Gramin and Greenpanel Industries to its portfolio.
Bajaj Auto has a 4 percent weight in the portfolio, Ajanta Pharmaceuticals and Credit Access Gramin have 3 percent weight each while Greenpanel Industries has 2.7 percent weight.
The brokerage has removed Alembic Pharmaceuticals, which had 5.3 percent weight and booked profit in the stock. Along with it, the brokerage has also removed Repco Home Finance from its model portfolio which had a 4.8 percent weightage.
What the brokerage said on rating rationale
Bajaj Auto: The company is close to the start of upcycling in autos. The strong rural market supports 2W demand while strong profitability will only get stronger with a pick-up in demand, Yes Securities said. "Attractive free cashflow yield; deserves higher multiple," it added.
Ajanta Pharma: The brokerage is of the view that the domestic business after COVID hit in FY21 will rebound with 15-16 percent growth in FY22. "Ajanta Pharma’s US business is on solid footing while small scale to support robust growth – fairly commoditized base barring 2-3 niche products," it said. A combination of domestic and US can bring it closer to the historical margin of 34 percent seen between FY15-17, the brokerage added.
Credit Access Gramin: Renewed momentum in disbursements is expected to continue. The consolidated AUM growth is estimated to accelerate to 25-30 percent in FY22. While Q3 may see elevated provisions, overall loss assessment could remain intact, Yes Securities said.
Many of the PAR 60/90 customers are expected to start paying regularly soon. "Estimate consolidated RoA delivery of 4.5-4.8 percent over the next two years, manifesting the substantial synergies of MMFL acquisition. The stock trades at 2.7x FY22 P/ABV, which is palatable for a best-in-class MFI," the brokerage house said.
Greenpanel Industries: Yes Securities believes Medium Density Fibreboard (MDF) will be the most promising building material segment in India over the next decade as it displaces low-end plywood and as readymade furniture industry picks up pace. It expects MDF industry growth to be more than 20 percent CAGR over FY21E-FY26E.
“With a capacity share of 36 percent, Greenpanel is the industry leader of MDF market in India and will be the biggest beneficiary of industry tailwinds. Value unlocking on the cards as the company would sweat its capacity to optimum utilization by FY23E along with financial deleveraging,” Yes Securities said.
Here is Yes Securities' Model Portfolio:
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