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I am sure the smell of 2 fantastic stocks in the video must have increased your appetite for another such company. Don’t worry the smell of these companies won’t increase your weight! If you have not yet watched the YouTube video, just click on the above Video.
We have more than 5000 companies listed on BSE and NSE together. Every stock doesn't need to perform outstandingly. So, selecting a few good companies from such a vast ocean is very difficult. To ease the difficulty to some extent, it is advised to have certain parameters in place through which we can filter desired stocks. Keeping that in our mind we have selected 3 Mid-cap companies which could be on the list of multi-baggers. That does not mean that there are only 3 companies in an ocean of more than 5000 companies. It is just that we feel these 3 are comparatively good. Let us revisit the basis for our selection:
1) Service sector companies
2) Strong online Presence
3) Business protected from current pandemic
4) Market Leaders in the respective industry
5) ROCE > 50%
The two companies we saw in the video were Indiamart Intermesh Ltd & Computer Age Management Services Ltd.
In this blog, we will look at another midcap company
Indian Energy Exchange Ltd. (IEX)
Just like how individuals can trade in the stock market to gain profit, electricity corporations can trade on the IEX to increase profitability and have better price discovery. Didn’t get it? Let us understand with a simple example. Pune’s daily electricity requirement is 5 kwh. But it only has 4 kwh for tomorrow. So, there is a power shortage. In this case, the electricity board will log on to IEX and find out if any other electricity board/transmission company/renewable energy company which has additional units and also offers a lower price. Then there will be a bidding process for that segment. This way Pune electricity board will be able to procure electricity at a lower rate to meet the shortage. At the same time, the entity which sold the excess electricity will be able to make profits.
Financial Summary:
Ratios:
ROCE = 51.2%
ROE = 36%
Debt to Equity = 0.0
*Company’s total revenue includes a large chunk of gain from the sale of investments. But the overall growth in revenue from operations is more than the growth in gain from the sale of investments.
In 2010, the company had 500 registered participants. Today, more than 6600 participants are registered on the exchange.
Out of participants registered to trade electricity contacts include 56 distribution companies, over 500 electricity generators, and over 4,200 open access consumers.
The benefiting open access consumers belong to various industries such as metal, food processing, textile, cement, ceramic, chemicals, automobiles, information technology industries, institutional, housing and real estate, and commercial entities.
I hope you have liked the information. You can also watch the YouTube video to know about the other two stocks.
Disclaimer: Investing/Trading in stocks is subject to market risks and there is no assurance or guarantee of returns – neither the principal nor appreciation on the investments. “CA Rachana Ranade” and her employees are neither responsible nor liable for any losses resulting from the investments. We might change our views on any company when the situation warrants. Kindly seek advice from your financial planner before investing. User discretion advised.
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